The shares jumped 9.5 per cent to 258.5p, valuing the group at £190m. IBM and HP, the US technology groups, may also be interested. IBM has an existing relationship with ITnet and HP recently paid £163m for Synstar, the UK-based provider and manager of IT support services.Matt Davis, an analyst at Williams de Broe, said: “ITnet has a strong and long established customer base in local government and this could just be an opportunistic attempt to catch investors while the stock is relatively cheap.” Mr Davis believes a final price for the company may be close to 300p.In June, ITnet lost its largest contract, worth £83m, for managing datacentre hosting for the Cabinet Office. A profits warning followed, resulting in the stock trading as low as 159p.

The loss of that contract led to a £20m write-down as only £5m of £25m costs were retrieved. Although that was a high-profile loss, the company has expressed confidence for the remainder of the year and has signed a number of contract extensions with local government.The company, which started life as the IT department of Cadbury Schweppes, had traded higher in bid speculation last week. Bridget Blow, the chief executive of ITnet, and a non-executive director of the Bank of England, owns more than 2 million shares and will increase her personal fortune by more than £6m if a deal is concluded at 300p. Ms Blow’s holding is, however, unlikely to play any significant part in the bid as institutional shareholders own 42.7 per cent of the stock..

Vodafone shareholders were given a boost today after the mobile phone giant doubled its half-year dividend payout. Turnover was £16.8 billion, down on the £16.9 billion seen a year earlier, while underlying profits remained broadly similar at £5.4 billion.. It’s taken nearly two government terms, but the Chancellor is now fully out of the closet as a paid-up member of the eurosceptic tendency. At the CBI conference in Birmingham last week, Peter Mandelson, the new European Trade Commissioner, warned Britons to stop gloating about superior economic performance The next day Gordon Brown duly gloated. Maybe you didn’t know this was “National Enterprise Week” (don’t worry, nor did anyone else), but Mr Brown is already in his element, unfavourably contrasting Europe’s highly regulated, safety-first business environment with the risk-driven approach of American business, which he believes Britain shares.
Yet he strikes a popular, if familiar, chord with the publication yesterday of Alan Wood’s report on European Union public procurement.

This highlights some key weaknesses in the way the single market rules operate, telling us what we already suspected but lacked the evidence to support – that though Europeans pay lip service to the idea of free competition between nations for public procurement contracts, very little of it is actually practised. If France, Germany or Italy can get away with awarding a contract to an indigenous supplier, this invariably is where it will go. Britons are routinely cut out, or that’s the implication of his report, anyway.Mr Wood is chief executive of Siemens in the UK and as his position might suggest, he’s a convinced europhile. But he’s not pulled his punches in a report which details a series of different abuses. Mr Wood is unable to cite any examples of discrimination in clear breach of Single Market public procurement law. However, he highlights a number of grey areas where the rules appear to be respected yet national firms are none the less favoured.Only 16 per cent of public procurement – amounting to just 2.5 per cent of European Union GDP – is advertised in the Official Journal at all, and even then, contracts are often shaped to suit a given national supplier, or a way is found of awarding the contract to a national supplier where foreign bidders offer better price or quality.

Some contracts are split into smaller lots so as to avoid the procurement rules altogether, while sometimes the price is “squeezed” so as to make it viable only for a state-subsidised supplier. Alternatively, there can be big legalistic and cultural barriers to gaining fair access.Mr Wood’s findings are based solely on anecdotal evidence, and it may be that many of the same criticisms could be levelled at UK procurement policy. For instance, the European Commission cites Britain’s failure to implement the EU “Remedies” directive on public procurement, which allows companies to seek compensation if the tendering procedure is unfair. One example of unfair procedure may have been the contract for the Scottish Parliament, which is being investigated by the European Commission.Even so, it seems all too likely that we are relatively minor offenders set against the French, the Germans, the Spanish and the Italians. We constantly moan about Europe, yet in truth we are much better Europeans than many of our neighbours.