At the end of a record first quarter for European mergers and acquisitions, ITV became the latest company to join a new trend, when it saw off an aggressive private equity bid from Goldman Sachs, Apax Partners and Blackstone Group.

This does not necessarily reflect investor confidence in ITV. True, if they had been really enthusiastic about the private equity consortium’s proposal, under which 52 per cent of the shares would have remained publicly owned, investors could have pushed the board harder. But there were concerns about the leverage proposed. It is a big leap to seven times 2006 earnings before interest, tax, depreciation and amortisation, from the current level of two times.

The result of this episode is likely to be that ITV increases the amount of cash it returns to shareholders. It could add significantly to its previously announced £300m buy-back: a further £600m would push leverage to just over three times ebitda.

UK investors care about cash and worry about leverage. The cash alternative did not offer a significant enough premium, against the prospect of getting more cash out of existing management. The consortium has, in a sense, performed the role of an activist investor, helping to persuade the current board to gear up.

This does not mean the consortium’s innovative public/private structure cannot work in other situations. But enthusiasm among existing shareholders is a prerequisite.