BSkyB forced into a corner over ITV stake
A three-year battle to overturn a UK competition commission ruling that BSkyB should sell down its 17.9% stake in competitor ITV looks like coming to an end. The Court of Appeal yesterday upheld the competition commission ruling that BSkyB should sell its 17.9% stake down to 7.5% due to "undue influence" the stake gives the company over ITV.
While BSkyB has 28 days to consider a further appeal to the Supreme Court experts believe there is little chance of success and BSkyB may well be looking to dispose of a 10% stake as soon as possible. When you consider that the stake in ITV was acquired at £1.35 a share against a share price of just 58p yesterday this has been a disaster for BSkyB. But will anyone step forward to acquire the 10% stake BSkyB will be forced to sell? Or will BSkyB look to bail out completely?
At this stage it is unlikely that BSkyB will look to dispose of the whole 17.9% stake but if somebody stepped forward with an acceptable offer which could cut the company's losses on the investment then who knows. The future of ITV has been shrouded in mystery for some months now with the broadcaster decimated by the advertising downturn and financial constraints.
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