Capital Radio shares rise as Tarrant gives his final answer: Yes, I'm staying after all

Chris Tarrant's final answer to Capital Radio was yes, it emerged yesterday, as the surprising news that he would continue to host the flagship breakfast show dealt a severe blow to rival stations.

Capital Radio shares had been under pressure for months on concerns that many listeners would switch to other shows when, as seemed likely, Mr Tarrant – a major draw to 95.8 Capital FM, the company's biggest station – left the early morning programme by the end of this year. Capital shares rose 5 per cent on the Tarrant news to 477.5p. In a separate trading update, the company said radio revenues were up 2 per cent for the last six months.

Only this week Mr Tarrant, who has hosted the show for 15 years, had said on a TV programme that he was definitely leaving because he didn't want to get up so early any more. "I really want to have some time off and to sleep a bit," Mr Tarrant had said.

The company said Mr Tarrant's sudden change of heart came about because the breakfast show would be given a new format, which he was very "excited" about. Details of this new format were not given. No more money – or any share options – was awarded to Mr Tarrant, the company said.

Mr Tarrant, who is paid more than £1m a year by Capital, said: "I just can't help it, radio is in my blood and so is Capital. I'm sorry to disappoint the competition, but I am not ready to hang up the Capital headphones yet!"

It was suggested that increasingly vitriolic comments from rival breakfast show hosts, bragging that their programmes would overtake Capital once Mr Tarrant left, had goaded the DJ into continuing the role. Others said Mr Tarrant was very loyal to Capital, which has been the launchpad for a highly successful TV career.

The Capital breakfast show draws some 1.8 million listeners, nearly a million more than its nearest commercial rival, Jono Coleman's show on Heart FM, which is owned by Chrysalis. Mr Coleman has been leading the taunts directed at Capital.

Paul Gooden, analyst at Morgan Stanley, said that many of the older audience for Capital in the morning only tuned in because they had "grown up with Tarrant". "The breakfast show hooks people [listening] in for the rest of the day. That's why it is so important," he said.