ISLEWORTH, UK: News Corporation's UK satellite services provider BSkyB is to appeal a British government ruling ordering it to reduce its 17.9% stake in ITV, the nation's largest commercial broadcaster, the value of which has plummeted since Sky bought the holding two years ago as a spoiling tactic to thwart the latter's mooted merger with Virgin Media.
BSkyB originally paid £940 million ($1.4bn; €1.1bn) for its stake in ITV, the value of which is estimated to have declined by around £700m following a sharp drop in ITV's market capitalisation.
The UK Competition Commission has ruled that BSkyB's holding could exert a potentially negative impact on the UK's broadcast sector, a decision that was upheld by the Competition Appeal Tribunal in November.
Should Sky's latest appeal be granted, the case will then be heard by the country's Court of Appeal.
While Sky insists that its investment is part of a long-term commitment to ITV, some commentators argue that the delay caused by the latest appeal could work in its favour should it sell its stock, as ITV is in the midst of a dramatic restructuring programme.
Says Simon Lapthorne, an analyst at Blue Oar Securities: "Put simply, BSkyB does not want to lose hundreds of millions of pounds. I did think they would appeal because if they had to sell the stake now they would be looking at a monumental loss."
Data sourced from Financial Times; additional content by WARC staff