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Commission recommends drastic cut in Sky's ITV stake

LONDON - The Competition Commission has recommended that BSkyB be forced to reduce its 17.9% stake in ITV to less than 7.5%, according to the official report published by the government today.

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This was the commission's favoured option out of two possible remedies, offered following its finding that Sky's acquisition "may be expected to operate against the public interest".

The other option was for Sky to sell its entire holding in ITV, but the commission preferred a partial divestment as "least intrusive" and "more proportionate" option.

It argued that below 7.5% "there would be no realistic prospect that BSkyB would be able to exercise material influence" on ITV.

As a reinforcement measure, it has also recommended that Sky should give undertakings that it will neither seek nor accept representation on ITV's board.

The next step is for any interested party to make further representations on the report by January 7, after which John Hutton, the secretary of state for business, will announce a final decision on January 29.

Sky issued the following response to the report: "We note the publication of the report and we are considering its contents carefully. The next phase of this process lies with the secretary of state. We will be making representations to him in due course."

If it has to reduce its stake to 7.5%, Sky would stand to lose around £190m of the £940m it paid for the 17.9% holding in November last year.

ITV said: "ITV welcomes the publication of the Competition Commission's report today and awaits a final decision by the secretary of state in due course."

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