The large gains pushed Carlton Communications shares up to 127.5p while Granada's share price hit 73.5p.
Opinion was split over whether or not the deal would be hit be regulatory problems. Numis Securities team of analysts said in a desk note: "Completion could take place by summer of 2003, depending on the length of the regulatory process. Given that the Competition Commission has already investigated ITV thoroughly through the proposed Carlton/United merger, this process should not be too drawn out."
Regarding cost savings at the company, Numis is predicting that the group could strip out £50m from combining the businesses completely. However, this figure could be lowered to £30m if, as advertisers are hoping, ITV maintains two independent sales houses.
Shares in both companies have been hit by continuing troubles at ITV, as advertisers said they were moving their budgets elsewhere and possible saviour Dawn Airey said she was going to take up the managing director role at BSkyB, rather than the chief executive role at ITV.
Also trading up was BSkyB, buoyant on the news that chairman Rupert Murdoch's dreams of a US satellite television network were a step closer to reality as the FCC effectively ruled out a merger between EchoStar and DirecTV.
The Department of Justice still has to rule on the deal, but it looks likely that Murdoch might finally be able to add DirecTV to his global satellite empire. BSkyB was up by 9.06% this afternoon, trading at 512p.
Other big gainers in the sector include the WPP Group, up by 7.6% to 431.75p; the publishers Pearson, up 7.8% to 604p and the Daily Mail and General Trust, up 8.9% to 522.5p.
Shares in London were boosted by gains on Wall Street, with the FTSE-100 index up by 3.8% to 3921.5 points.
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