March 18 (Bloomberg) -- Japanese stocks gained, paced by media shares such as Fuji Television Network Inc. and Tokyo Broadcasting System Inc., on speculation takeovers in the industry will boost shareholder returns.

Livedoor Co. may raise funds to acquire control of Fuji TV, the Asahi newspaper said, while Fuji TV Chief Executive Hisashi Hieda said yesterday the nation's biggest private broadcasters are discussing measures to fend off hostile takeovers.

Those may include boosting dividends as Fuji TV did this week, announcing a fourfold increase, said Soichiro Monji.

``There's a lot of expectation broadcasters will follow Fuji TV's lead to boost payouts to avoid getting taken over,'' said Monji, who helps oversee $11 billion as senior strategist at Daiwa SB Investments Ltd. in Tokyo. ``Livedoor's move to acquire Fuji TV has brought attention to the importance of shareholder value and that's made those shares attractive.''

The Topix index gained 11.05, or 0.9 percent, to 1203.33 at the 11 a.m. lunch break in Tokyo. A measure of information and communications companies, which includes Fuji TV and Tokyo Broadcasting, was the biggest contributor to the index's gain.

The Topix is set for its highest close in 11 months. The Nikkei 225 Stock Average climbed 127.74, or 1.1 percent, to 11,903.24.

Fuji TV, Tokyo Broadcasting and TV Asahi Corp. had the three biggest percentage gains in Tokyo Stock Exchange's first section, which has 1,677 members.

Plenty More Room

Fuji TV, Japan's largest commercial broadcaster, climbed by its daily limit of 40,000 yen, or 14 percent, to 324,000. The stock is set for its biggest gain since April 2000.

The company quadupled its dividend payout this week in an effort to fend off Livedoor's takeover attempt.

Livedoor, an Internet service provider that owns almost half of Fuji TV affiliate Nippon Broadcasting System Inc., may be raising as much as 300 billion yen ($2.9 billion) to make a takeover bid for Fuji TV, the Asahi reported.

Tokyo Broadcasting jumped 320 yen, or 16 percent, to 2,380, on course for its biggest gain in at least three decades. TV Asahi soared by its exchange-imposed daily limit of 40,000 yen, or 17 percent, to 275,000, the biggest jump since shares were first sold to the public in October 2000.

The dividend yield, or dividends per share divided by the share price, for both Tokyo Broadcasting and TV Asahi stood at 0.4 percent, according to data compiled by Bloomberg.

That's less than half the 1 percent average of all companies in the Topix index.

``There's plenty of room for broadcasters to boost their payouts many times over,'' Daiwa SB's Monji.

To contact the reporter on this story: Michael Tsang in Tokyo at mtsang1@bloomberg.net.

Last Updated: March 17, 2005 21:25 EST