BSkyB may be forced to sell ITV stake
October 03, 2007
LONDON – U.K. satcaster BSkyB could be forced to sell its 17.9% stake in commercial broadcaster ITV, after antitrust regulator the Competition Commission found Tuesday that the acquisition was "against the public interest."
Shares in ITV rose 3% to £1.04 ($2.08) on the news of the Commission's provisional finding. The regulator will now consult on "possible remedies" to its findings that could include forcing BSkyB to sell all or part of the ITV shareholding.
The regulator will deliver its final recommendation by January 2, 2008 and a decision will then be made by the trade minister John Hutton.
"The Competition Commission has provisionally found that the acquisition by British Sky Broadcasting plc (BSkyB) of a 17.9% share in ITV restricts competition and therefore operates against the public interest," the commission said in a statement.
"In its provisional findings, the report published today by the commission has concluded that BSkyB's shareholding in ITV would be likely to lead to a substantial lessening of competition by giving it the ability to influence ITV's strategy."
Competition Commission chairman Peter Freeman added that by being ITV's biggest shareholder, BSkyB would have "both the ability and incentive to take advantage of opportunities to weaken ITV or prevent it from taking actions that would threaten BSkyB's interest."
The satcaster issued a neutral response, saying only that it noted the response and would "continue to engage with the commission during the remainder of this process."
BSkyB stunned the media industry here when CEO James Murdoch launched a lightning raid on ITV shares in November 2006. The move was seen as a bid to block tentative merger talks between ITV and Richard Branson's Virgin Media, then know as NTL.
ITV executive chairman Michael Grade has since warned of the potentially damaging effect of Sky's influence on ITV.
ITV said Tuesday it welcomed the commission's decision.
"We will be reviewing the Commission's notice of possible remedies in detail and look forward to working with the Commission so that the issues arising from BSkyB's stake can be addressed," ITV said in a statement.
Shares in ITV rose 3% to £1.04 ($2.08) on the news of the Commission's provisional finding. The regulator will now consult on "possible remedies" to its findings that could include forcing BSkyB to sell all or part of the ITV shareholding.
The regulator will deliver its final recommendation by January 2, 2008 and a decision will then be made by the trade minister John Hutton.
"The Competition Commission has provisionally found that the acquisition by British Sky Broadcasting plc (BSkyB) of a 17.9% share in ITV restricts competition and therefore operates against the public interest," the commission said in a statement.
"In its provisional findings, the report published today by the commission has concluded that BSkyB's shareholding in ITV would be likely to lead to a substantial lessening of competition by giving it the ability to influence ITV's strategy."
Competition Commission chairman Peter Freeman added that by being ITV's biggest shareholder, BSkyB would have "both the ability and incentive to take advantage of opportunities to weaken ITV or prevent it from taking actions that would threaten BSkyB's interest."
The satcaster issued a neutral response, saying only that it noted the response and would "continue to engage with the commission during the remainder of this process."
BSkyB stunned the media industry here when CEO James Murdoch launched a lightning raid on ITV shares in November 2006. The move was seen as a bid to block tentative merger talks between ITV and Richard Branson's Virgin Media, then know as NTL.
ITV executive chairman Michael Grade has since warned of the potentially damaging effect of Sky's influence on ITV.
ITV said Tuesday it welcomed the commission's decision.
"We will be reviewing the Commission's notice of possible remedies in detail and look forward to working with the Commission so that the issues arising from BSkyB's stake can be addressed," ITV said in a statement.
