The government has ruled that BSkyB must reduce its stake in ITV from 17.9% to below 7.5%.
Business secretary John Hutton followed the Competition Commission’s recommendation to reduce the stake, which now leaves Sky until Monday 25 February to lodge an appeal against the decision (see
Sky Given More Time To Appeal Against ITV Share Sale).
In response to the ruling, Sky said that it would “give careful consideration to the announcement and confirm any further steps in due course”.
ITV said that it warmly welcomed the decision and found that it was in the best interests of the majority of its shareholders.
Sky acquired the 17.9% stake in ITV in November 2006 for £940 million, however since then ITV’s share price has fallen significantly.
Sky, having bought the shares for 135p each, could now lose around £250 million from the sale of the shares, assuming it sells at this morning’s price of 73p.
The satellite broadcaster did manage to persuade Hutton not to announce the period of time within which the shares must be sold.
A recent report in the Mail On Sunday claimed that Sky will attempt to claim damages from the government if forced to sell its shares at a loss (see Sky Prepares For ITV Ruling).
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