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BSkyB told to sell shares in ITV
BSkyB must reduce its holding in ITV from the current level of 17.9% to below 7.5% and not take a seat on the ITV board, the government has ruled. Business Secretary John Hutton accepted the findings of the Competition Commission's study into BSkyB's stake. BSkyB has until Monday 25 February to lodge an appeal against the decision. ITV said that it warmly welcomed the government's decision, while BSkyB said it would carefully consider the findings before deciding what to do. Paper loss On 17 November 2006, BSkyB announced that it had spent £940m buying 17.9% of ITV, but ITV's share price has fallen significantly since then. BSkyB bought the shares for 135 pence each. They opened on Tuesday up 1p at 73p. At current prices, BSkyB could lose about £250m from the sale of the shares. Mr Hutton has decided not to announce how long he is giving BSkyB to sell the shares. Media row Virgin Media argued that BSkyB only bought the stake to block a takeover of ITV. But BSkyB said it had not sought to influence ITV and had only bought the shares as an investment. The shares were bought at a time when ITV was struggling without a chairman and NTL, which has since been rebranded as Virgin Media, was considering a takeover bid. Four days after BSkyB bought the stake, ITV rejected NTL's approach saying it undervalued the company. A week after that, ITV announced that Michael Grade was leaving the BBC to become its new chairman. The Competition Commission ruled in December last year that BSkyB's shareholding was bad for competition and not in the public interest. Artice from the BBC No one has commented on this article. |
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