ITV calls for Sky's removal from its share register

by Daniel Farey-Jones, Brand Republic 07-Nov-07, 09:00

LONDON - ITV wants the Competition Commission to force BSkyB to dispose of all of its 17.9% shareholding, according to its submission to the regulator.

The submission states that the complete divestment of the stake is the "only remedy" to the problem of Sky's influence over ITV's own decisions on future investments.

Other measures, such as behavioural remedies or making Sky reduce its shareholding to 9.9%, would not be effective, ITV argues.

Making Sky reduce its shareholding to 4.9% would at least begin to address its concerns, it added, if the commission decided on a partial divestment.

ITV's submission was a response to the Competition Commission's provisional findings that Sky's acquisition of the stake last November did lessen competition in the media sector and that it was considering a range of actions, including forcing Sky to dispose of its entire shareholding.

Although BSkyB's stake is below the 20% limit allowed by the Communications Act, the commission said there was motivation and opportunity for the pay-TV group to weaken ITV.

Sky's own response was to offer to hand over a fifth of its voting rights to an independent trustee, leaving it in direct control of 14.9% of ITV shares.

Earlier this week, it was reported that Apax, the private equity firm, was considering making a third takeover approach to ITV.

The broadcaster's current share price is 94.5p, meaning that if Sky were to sell its shareholding today it would get a £658m return on its £940m investment.