Sky ordered to cut ITV stake

BSkyB has been ordered to sell the majority of its 17.9% stake in rival ITV. The long-awaited ruling which stipulates that the shareholding must be reduced to under 7.5%, was made today (September 29) by the Competition Appeal Tribunal.

It follows an earlier ruling by the Competition Commission – and subsequent appeal by the satellite broadcaster – that the stake must be reduced to under 7.5%. The ruling is expected to trigger a takeover battle for the UK’s largest commercial broadcaster.

However, Sky is understood to be considering yet another appeal. Sky has been set a period of time, thought to be six months, to reduce its holding. If it appeals, to either the court of appeal, House of Lords or the European Court of Justice, it can request a suspension of that remedy while the legal process continues.

Sky spent £940m buying the stake in November 2006 under former chief executive James Murdoch, in what was considered a tactic to prevent a mooted merger between cable rival Virgin Media and ITV. Its stake is worth just a fraction of that now, with ITV’s share price trading just over the 40p mark – a drop of around £650m overall.

Five owner RTL has been mooted as a potential purchaser for ITV, although it would probably have to sell Five in order to appease competition regulators. Five’s incoming chief executive Dawn Airey was poached from ITV earlier this year, where she was managing director of global content.

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