Shares in Sky fall as ITV becomes bid target
LONDON - Shares in BSkyB were falling this morning after the Competition Appeal tribunal ruled against it last night, saying it must reduce its stake in ITV, which has renewed talk that the commercial broadcaster could become a bid target.
Sky's shares were down 3.3% this morning to 394p as it faces losses of hundreds of millions of pounds by writing down its investment in ITV. BSkyB's 17.9% stake is now worth less than £300m compared with the £940m it paid in November 2006.
The tribunal said in its "view there is no substance in BSkyB's complaint" and it unanimously decided that Sky's application was dismissed. It must reduce its 17.9% stake in ITV to below 7.5%.
The Tribunal said: "A shareholding below 7.5% together with certain behavioural undertakings would remove any realistic prospect that Sky would be able materially to influence ITV's policy."
As well as ruling against Sky, the Tribunal ruled in favour of Virgin Media's argument that public interest had not been properly examined by the Competition Commission. Virgin, then NTL, had been in talks to acquire ITV when Sky, led by then chief executive James Murdoch, bought its stake, which was widely seen as a way to block the merger.
That ruling may mean Sky having to sell even more of its stake, which could see Sky offload all of its shares onto the market resulting in ITV being bought.
Prior to the ruling several media companies are said to have approached Michael Grade, ITV's executive chairman, about them buying a stake as a strategic investment prior to a possible bid.
Those interested in buying ITV include Five-owner RTL, 'Big Brother' producer Endemol, Italy's Mediaset and media billionaire Haim Saban.
ITV, which saw its shares fall slightly this morning down 1.8% to 40.25p, welcomed the Competition Appeal Tribunal ruling.
Its statement said: "We welcome today's judgment by the Competition Appeal Tribunal dismissing in full BSkyB's appeal against the decisions of the Competition Commission and the Secretary of State in relation to the acquisition of Sky's 17.9% interest in ITV.
"We also note that the Competition Appeal Tribunal upheld Virgin Media's appeal in relation to the media plurality test and we now await the next steps in the process."
Sky could now appeal to the Court of Appeal. In a statement it said it would consider its next steps in due course.
Last night's ruling was on Sky's appeal against a decision in January by the Competition Commission that ordered Sky to reduce its stake to no more than 7.5%, in order to alleviate concerns that its influence on ITV restricted competition.
Latest jobs Jobs web feed
- Creative Production Controller (Maternity Cover) Asthma UK £34,361 - £36,169, London (Central), London (Greater)
- Commercial Market Analyst UCAS c.£35,000 , Cheltenham, Gloucestershire
- Senior Digital Executive Innesco £20k-26k, London (Greater) / London (Central), London (Greater) / London (City of), London (Greater)
- Senior Product Manager Ball & Hoolahan £50,000 per annum, London (Central), London (Greater) / London (City of), London (Greater)
- Marketing Brand Manager Clipper Ventures Circa £40k - dependent on experience, South East England / South West England / Gosport, Hampshire
- Customer Insight Manager Tottenham Hotspur Between £40,000-£45,000 per annum + benefits (dependant on experience), London (North), London (Greater)