This week will see Sky launch its appeal against the Competition Commission’s ruling forcing it to reduce its 17.9% stake in ITV to under 7.5%.
The news comes three weeks after business secretary John Hutton followed the Competition Commission’s recommendation, leaving Sky until next Monday to lodge an appeal (see
Sky Told To Reduce ITV Stake To Below 7.5%).
According to sources close to Sky, the appeal will focus on the Competition Commission’s report.
The appeal will argue that the Commission was wrong to decide that Sky’s holding of ITV shares – without it having any representation on the ITV board – created a situation worth investigating.
It will also argue that it was wrong of the Commission to find that its stake had an adverse effect on competition, citing factual evidence that ITV is pursuing an independent strategy without input from Sky.
It will add that the 7.5% figure the stake must be reduced to is “arbitrary”. The satellite broadcaster will argue that its offer to give up all of its voting rights should have been sufficient to allay the commission’s concern that it could use its holding to block any special resolution proposed by ITV.
At the start of the month, Sky announced a before tax downturn of £36 million for the first six months of its financial year to end December, as the value of its stake in ITV fell (see BSkyB Reports Before Tax Downturn Of £36 Million).
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