Watchdog tells BSkyB it must reduce stake in ITV

Published on Thursday 20 December 2007 09:48

BROADCASTER BSkyB has been told to reduce its stake in ITV – in which Sky bought a 17.9 per cent shareholding last November for £940 million.

The Competition Commission today recommended that the stake – bought while James Murdoch was chief executive – be reduced to less than 7.5 per cent.

The watchdog also said it wanted to see undertakings from BSkyB that it would not seek representation on ITV's board.

ITV has said in the past that a complete sale of the BSkyB shareholding would be the only way to ensure it could not influence strategy. But with the stake now worth just 600m, any forced sale could lead to big losses for BSkyB.

A spokesman for BSkyB said: "We note the publication of the report and we are considering its contents carefully. The next phase of this process lies with the Secretary of State. We will be making representations to him in due course."

The findings of the commission were published ahead of a final ruling from John Hutton, Business and Enterprise Secretary, in the new year. Mr Hutton is required to accept the commission's findings, but could still come to a different conclusion on the proposed remedies. He has until January 29 to announce his final decision.

ITV said it welcomed the report and now awaited the final decision by Mr Hutton. Analysts said today's findings could re-ignite takeover speculation surrounding ITV, reopening the door for Virgin Media and other potential suitors to seek a possible merger.