BSkyB has won the right to appeal the Competition Commission’s ruling it should sell off the majority of its stake in rival ITV based on the fact that the purchase created an anti-competitive merger.
The Commission’s ruling in January 2008 said that Sky’s position as the largest shareholder in ITV prevents the commercial broadcaster from pursuing an independent competitive strategy.
Sky became ITV’s largest shareholder in November 2006 when its then chief executive, James Murdoch, spent £960m, stopping a putative £4.7bn bid for ITV by cable company NTL, now Virgin Media.
It sought leave to appeal the ruling because it felt the order to reduce its stake from 17.9 % to below 7.5% is a “disproportionate” and “unreasonable” remedy.
Sky had offered to give up all voting rights in respect of its shareholding, which it says would have fully addressed concerns arising from Sky’s ability to vote on shareholder resolutions, but the measure was rejected by the Commission.
Since Sky bought its stake the value of ITV shares have crashed and Sky stands to lose millions of pounds if forced to divest.