'Sell ITV Stake', Appeal Tribunal Orders Murdoch

09 December 2008

LONDON: Rupert Murdoch (pictured) is not well known for backing losers but even the Teflon-coated media magnate can't buck the law of averages – least of all (according to superstition) in a leap year.

A spoiling 17.9% stake in the UK's largest broadcaster ITV was  seized in November 2006 by NewsCorp-controlled satellite monopoly British Sky Broadcasting Group in a successful attempt to torpedo the latter's merger with Virgin Media.

Two months ago Britain's Competition Commission ruled that the stake be reduced to below 7.5%, a decision promptly appealed by Sky and rejected on Friday by the Competition Appeal Tribunal.

But a sell-down will cost Clan Murdoch dear, given that ITV's share have nosedived since Sky acquired the stake for £940 million ($1.4bn; €1.1bn).

If the stake is reduced to 7.5% now, the fall in the broadcaster's market capitalisation will cost the clan in the region of £700m

With nothing to lose except £700m, Sky intends a further plea to the Court of Appeal for permission to appeal the CAT decision.

If granted, the eventual decision – perhaps eighteen months hence given the torpidity of the English legal system – could coincide with an upsurge in ITV's stock.

Data sourced from Wall Street Journal Online; additional content by WARC staff