Branson calls for action over BSkyB’s ITV stake

Sir Richard Branson has called on the Office of Fair Trading to intervene after satellite broadcaster BSkyB bought a stake in ITV.

Sky bought 17.9% of ITV shares for £940m on Friday, which Branson believes was a way of spoiling a move by cable operator NTL to take over ITV. Branson, NTL’s biggest stakeholder, says it is a "blatant attempt to distort competition".

But Sky insists that it has done nothing wrong and that the transaction will benefit both parties. A spokesman says: "BSkyB believes that ITV is one of Europe’s premier broadcasting and production businesses, and holds substantial potential for long-term value creation. This acquisition of shares has taken place without the prior knowledge of the ITV board of directors, but BSkyB has communicated to ITV’s board its intention to be a supportive shareholder."

Announcing the decision on Friday, Sky chief executive James Murdoch said: "We want our investment to give ITV the room it needs to put the best new management in place and explore the full range of options to create value for all shareholders."

Sky says it has no intention of its stake exceeding the 20% that would contravene current UK cross-media ownership rules.

But the company hit back at Branson in a statement, saying: "[Branson] seems to believe that he and his partners in NTL:Telewest have a unique right to acquire ITV."

Less than two weeks ago, NTL admitted it had made tentative approaches to ITV. It was said to be planning a £5bn takeover of the broadcaster, which is currently without a chief executive, to create a rival to Sky. NTL is rebranding as Virgin Media after acquiring Virgin Mobile earlier this year.