ITV Tells Sky What to Do With its Token Gesture

30 October 2007

LONDON: Virgin Media, the US-owned UK cable operation, is not wild with enthusiasm at the recent offer by New Corporation's UK satellite monopoly BSkyB to marginally reduce the size of its critical 17.9% stake in ITV, Britain's largest commercial broadcaster.

The stake, snatched in November last year, was a masterly spoiling tactic that brought the putative merger between Virgin and ITV to a juddering halt.

The matter has since been referred to the Competition Commission, with which Sky is now playing a cat and mouse game. Virgin and ITV are pressing for Sky to divest itself of the entire stake - an outcome supported by the Commission, although it has declared itself open to other solutions.

Sky has responded by offering only to cede voting rights on a proportion of its shares. This, it says, would deal with the commission's main concern - that Sky could block a major share issue by ITV, which would need the approval of 75% of votes cast.

In such a situation, Sky now says it would vote only 14.9% of ITV shares - an offer seen by the other combatants as a merely token gesture.

There is another good reason for Sky to cling to its ITV shares. Bought last year at a total cost of £940 million ($1.93bn; €134bn), their value has since shrunk to £680m - a dive of 27.65%.

Data sourced from; additional content by WARC staff