A senior executive at German media giant Bertelsmann, Channel 5's ultimate owner, has played down the company's interest in Carlton or Granada, describing the ITV giants as overvalued.

"These values appear very high and they don't just appear very high to us. Expect them to be high to the US as well," he said. Bertelsmann owns RTL Group, the majority shareholder in Channel 5, and has long been tipped as a possible buyer of Carlton or Granada. Rumours of a bid for an ITV company have intensified since the publication this month of the draft communications bill, which allowed non-EU businesses to buy ITV, and lifted the ban on Channel 5 acquiring an ITV licence. Bertelsmann has not spoken publicly about the UK market since the communications bill and Dr Hesse's remarks will fuel speculation about ITV's future.

He warned that Carlton and Granada were not an attractive investment at current market prices and said the UK media sector did not face imminent upheaval.

"There is a very high value that is attached to both ITV companies and the big players do not just want to own them but to create value. We need to look at it in a not too emotional sense."

"We will see how things evolve in the next six months. There will be changes but it will not come in a flash," he said.

However, Dr Hesse broadly welcomed the bill, which is expected to become law in November next year.

"It seems to open more opportunities for the players in many different directions," he told the PricewaterhouseCoopers annual European media and entertainment summit in London.

A key Bertelsmann priority before it floats in 2005 is to gain 10% of the UK television market. Channel 5 hovers around the 6% mark.

Adam Singer, the chief executive of cable operator Telewest, also opened up the possibility of cable tycoon John Malone bidding for an ITV franchise when he told the conference such a move would make strategic sense to the American billionaire, who owns 25% of Telewest through his Liberty Media group.

"People like Malone suddenly see a real opportunity in this market to create multiple shelf-space owning opportunities.... Clearly a very interesting opportunity has come up," he said.

Dr Hesse made his comments despite a prolonged slump in Carlton and Granada's share prices over the past 12 months.

Carlton was trading at 265.75p this afternoon - valuing the company at £1.7bn - down from a year high of 415p. Granada was at 131.5p - a market capitalisation of £3.64bn - against a year high of 184p.

Guardian Unlimited © Guardian Newspapers Limited 2002

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