SHARES in cable television group Telewest jumped yesterday after rumours circulated it was at the centre of takeover speculation.

Interest saw shares jump nine per cent at one stage with the City hoping the company, which employs around 550 at its Team Valley base, would be the subject of a £6 bn bid.

The company, which has seen its share price suffer recently, perked up after a report over the weekend said a US venture capital company, Callahan Associates, had approached the company regarding an offer.

Telewest shares slid by more than ten per cent on Thursday after it revealed six-month trading figures showing the company had slumped further into the red.

The company said a number of "glitches" had forced it to review its number of digital customer. It had originally planned to sign up 500,000 customers by the end of the year but said this target had been put back by up to three months.

It blamed a series of problems, including the shortage of set-top boxes, for the delay.

The rumours in the city come after talk over the weekend said a possible merger between Telewest and fellow cable firm NTL would enable the two to compete in the digital TV market with BSkyB.

A key factor was thought to be the desire of software giant Microsoft to see UK cable consolidate - it has a 23 per cent holding in Telewest and five per cent in NTL.

Microsoft is believed to be anxious that it should not lose out in the race to make the internet available through digital televisions.

Telewest chief executive Adam Singer admitted the company was 18 months behind BSkyB in getting its technology to customers.