Two bid approaches - for Alliance & Leicester and Imperial Energy, and talk of a third in the wings for ITV, helped restore sentiment to London shares this morning.

The FTSE 100 rose 67.2 to 5328.3 by 10.25am.

ITV rose 8 per cent to 41.4p as John de Mol, who controls giant Dutch production company Endemol, responded to weekend reports that he might be interested, said a combination with ITV could make sense, depending on the numbers. Morgan Stanley raised its rating from underweight to equal weight saying recent share price falls had gone too far.

Alliance & Leicester gained 48 per cent to 325p as it said it had received a bid approach, understood to be from Santander of Spain at 299p or 317p including the coming dividned payment. The price is now way above the bid indicating that another contender such as Lloyds TSB and Clive Cowdery's Resolution may appear.

Panmure Gordon said Lloyds could extract £300 million cost savings from a deal.

Bradford & Bingley jumped 14 per cent to 54p and Paragon Group, the other buy to let mortgage lender, gained 17 per cent to 62.5p.

Lloyds TSB gained 5 per cent to 289.5p.

Reed Elsevier was among the few fallers, down 2 per cent to 532.5p after Deutsche Bank cut its rating to ’hold’ from ’buy’.

Imperial Energy soared over 28 per cent to 992p after it responded to Indian press reports that ONGC, the state oil company, had approached it with a bid, saying it had indeed received a bid.

Dawnay Day Treveria, which is attempting to sell its assets or the whole company, lost 14 per cent after extensive coverage of the financial problems of its founding company Dawnay Day which holds an 8 per cent stake and manages its assets.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive