[Media Boy UK]

BSkyB may be forced to sell ITV stake

BSkyB could be forced to sell its 17.9% stake in ITV after the Competition Commission ruled it was "against the public interest". The satellite giant spent £940m buying the stake last November in a move that effectively thwarted cable group NTL (now Virgin Media) from acquiring ITV.

However, after a lengthy inquiry the Competition Commission has found the stake could lead to a substantial lessening of competition by giving Sky the ability to influence ITV's strategy.

"As a pay-TV operator, Sky faces competition from the free-to-air TV offer, of which ITV is an important part," the inquiry's chairman Peter Freeman said in a statement.

"BSkyB would therefore have both the ability and incentive to take advantage of opportunities to weaken ITV or prevent it from taking actions that would threaten BSkyB's interests."

However, the regulator said it did not think the stake gave rise to competition concerns in other areas, such as advertising and news provision.

The Competition Commission has put forward three potential remedies to alleviate the situation. They are:

• BSkyB sells its entire stake
• BSkyB sells enough of its stake to ensure it no longer has material influence over ITV Views are invited as to the level of the sale of the stake required – previous examples include reductions to just below 10% and just below 15%.
• BSkyB sells some of its stake and is subject to behavioural restrictions These restrictions might relate to areas such as voting behaviour and the solicitation or acceptance of board representation. Views are invited on suggestions.

Sky's major rival Virgin Media, which initially called for the stake to be investigated, said the Competition Commission's provisional findings were "a major step towards addressing the problems caused by Sky's stake in ITV".

A spokesman for the cable giant said: "Strong remedies are required to finally resolve the matter - Sky should not be permitted to remain in a position where there is any question whatsoever about its ability to influence ITV. We will be closely engaged with the Competition Commission during this next remedies stage."

The Competition Commission's report is provisional at this stage and it hopes to file its full report in December.

More info here: http://www.broadcastnow.co.uk/broadc...StoryID=171478

Info from Broadcast.

Competition ruling could loose Sky £200m

BSkyB could lose in the region of £200m if it is forced to sell its 17.9% stake in ITV, one of the sanctions that could be imposed by the Competiton Commission after its provisional findings this morning.

The Competition Commission said the holding restricted competition, is against public interest and that such a stake would allow the satellite broadcaster to weaken ITV and alter its strategy.

Sky paid £940m (135p a share) in November 2006, a move widely regarded as a blocking tactic against NTL's ambitions to buy ITV. Based on ITV's current share price of 102.4p, Sky's holding is valued at £717m.

However, Virgin Media sources said that although the cable giant is pleased with the provisional findings, it was "unlikely" to make a renewed bid for the UK's biggest commercial broadcaster.

"First of all the credit market is in a mess," said a source. "On top of that, Virgin Media itself is up for sale. Thirdly it does not have a full time chief executive officer – it needs to get its own house in order first."

The Competition Commission will reach a final decision before the end of the year.

Info from Broadcast.

ITV is again a takeover target


ITV is once again a "potential target for take-over" following provisional findings from the Competition Commission that could force BSkyB to sell its 17.9% stake.

Virgin boss Richard Branson hinted last week that he was still interested in acquiring ITV but as analysts point out, "he appears in a far weaker position than previously".

Virgin insiders suggested this morning (2 October) that an imminent bid is unlikely.

Virgin Media is up for sale itself and currently has no chief executive.

The credit markets have also deteriorated sharply since its approach last year.
Matthew Walker of Lehman Brothers said that RTL could be interested in the future although added that the company has said many times it will focus on Five.

Numis Media analysts said they believed the Commission has made a "harsh judgement".
"We expect that BSkyB will have to sell down its stake in ITV to perhaps 9.9% or 14.9%," the company added.
In 2006, ITV was also the subject of two attempted takeovers from a Greg Dyke-led private equity consortium.

The broadcaster later began negotiations for a potential merger with cable operator NTL, prompting Sky to swoop on its stake in ITV.
ITV's share price had risen by 1.60p to 102.8p when Broadcastnow.co.uk published.

More Info here: http://www.broadcastnow.co.uk/broadc...StoryID=171480

Info from Broadcast.