Shares in ITV rose sharply yesterday, boosted once again by vague rumours of a private equity bid and with talk of chief executive Charles Allen's departure also doing the rounds, dealers said.

"We're hearing that Charles Allen is going to resign," said one analyst, who asked to speak off the record.

A "dream team" of ex-BBC director general Greg Dyke and outgoing Ofcom head Stephen Carter have been lined up to replace him, he added. Mr Dyke was the figurehead for the private equity-backed 130 pence a share bid that was rebuffed by the ITV board earlier this year.

In a note published yesterday, Sanford Bernstein told clients that it believes the likelihood of a fresh private equity bid is high unless management shows significant results soon.

"Unless the ratings start to pick up fairly soon, investors' demand for change will become hard to resist, opening up the opportunity for a new private equity bid," it added.

It calculated that at current levels, a deal priced at 120 pence per share could yield a return of more than 20 per cent for a potential private equity investor.

ITV poured cold water on the rumours.

"I can tell you categorically that no decision of this nature has been made, because an announcement would have had to have been made to the Stock Exchange," said the spokeswoman.

Shares closed up 2.75p at 104.25.