Will ITV become a subject of interest?

ITV stake up for grabs

Following the decision that BSkyB must reduce its stake in ITV, the broadcaster is set to become the subject of much interest to those willing to buy part, or all of BSkyB's stake.

The Court of Appeal yesterday threw out BSkyB's bid to overturn a Competition Commission ruling made more than two years ago which demanded that it reduce its stake in ITV from 17.9 percent to less than 7.5 percent.

The decision, which was made to prevent the satellite broadcaster having too much influence over the competition, has left the Rupert Murdoch-owned satellite broadcaster considering whether to offload its entire holding.

BSkyB has received approaches from rival media firms and buyout groups, with private equity house Blackstone and Italian media group MediaSet believed to be among the interested parties. This is Money states.

However sources said yesterday that RTL, the German media giant which owns Bristish channel Five TV, will not bid.

BSkyB bought its stake of ITV for GBP£1.35 a share in 2006, the equivalent of GBP£940 million, in a move designed to block a takeover bid for ITV from NTL, now Virgin Media.

The value of BSkyB's stake has since declined by some GBP£500 million, to around GBP£400 million, with ITV's shares closing at 58.1p (down 0.3p).

BSkyB, which had already had its objections to the Commission ruling thrown out by the Competition Appeal Tribunal, now has 28 days to consider a third appeal, this time to the Supreme Court. Competition lawyers said its chances of winning were slim.

A spokesman for Virgin Media, Sky's biggest rival in the UK pay TV market, said: "After three years of challenges by Sky, the Court of Appeal's decision should now bring this matter to a close.

"The court's judgment reaffirms the prior rulings of the OFT, the Competition Commission and the Competition Appeal Tribunal that Sky's 17.9 percent stake in ITV is anti-competitive." He added: "We hope Sky now reduces its stake in ITV without further delay," the British paper The Independent states.

Any sale, however, will be embarrassing for Sky's chief executive, Jeremy Darroch, because the company stands to make a huge loss on its investment. He was finance director when then chief executive James Murdoch, now head of his father's empire in Europe and Asia, launched his audacious attack on the broadcaster.

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