Sky’s hand forced on ITV shares
Thursday, January 3rd, 200817.9 per cent stake to be downsized
The Competition Commission have decided that the Sky-owned 17.9 per cent stake in ITV is large enough to inhibit competition in the UK TV market, and must therefore be reduced.
As probably everyone now knows, Sky scuppered a possible takeover bid of ITV by the nascent Virgin Media by conducting a share raid on the terrestrial telco in late 2006.
The Commission would like to see the current stake reduced to something around 7.5 per cent, which at the moment would see Sky losing around £200million on their investment. Sky have stated that they will challenge the ruling if forced into a loss-making sale unless compensation is provided.
John Hutton, secretary of state for business, is expected to announce his decision on how the stake will be broken up and what, if any, concessions will be made to Sky on the 29th of January.
