BSkyB Waits for Government Verdict on ITV Stake

15 January 2008

ISLEWORTH, UK: UK satellite services giant BSkyB must decide by the end of this month whether to appeal against a regulatory ruling over its controversial 17.9% spoiling stake in Britain's biggest commercial broadcaster, ITV.

The Competition Commission judged at the end of last year that the size of News Corporation-controlled Sky's slice of the ITV pie could hamper competition, and recommended to secretary of state John Hutton it should be reduced to under 7.5%.

Hutton is due to make his decision public on January 29, at which point Sky will make its next move in response to the Commission's findings, which it describes as "unprecedented".

Originally, Sky was told to lodge any appeal by January 16, but representations to the Competition Appeals Tribunal have been rewarded with the right to wait until it has heard Hutton's verdict.

Sky swooped on the ITV shares in November 2006 just as cable monopoly NTL (now rebranded Virgin Media) was mulling a possible merger with the broadcaster, effectively scuttling the deal.

A 10%-plus divestment will hit Sky's pockets hard. It paid £940 million ($1.84bn; €1.23bn) for the shares, and stands to make a loss of £270m if, indeed, it can find a buyer amid the current economic turmoil.

Data sourced from Financial Times online; additional content by WARC staff