Branson Bites Back At Sky’s Swoop On ITV
Sir Richard Branson, NTL’s biggest shareholder, is set to challenge BSkyB after the satellite giant bought an almost 18% stake of ITV late on Friday, in a deal worth close to £1 billion.
NTL has said that it will complain to the competition authorities, including the OFT, the European Commission and Ofcom, about Sky’s £940 million purchase of 17.9% in ITV, which it bought from Fidelity and other institutional investors.
NTL will call on the authorities to force Sky to sell its stake. Sky, led by chief executive James Murdoch, has snapped up the stake to stifle NTL’s planned £5 billion takeover of ITV. It is understood that Branson, who has a 10.5% stake in NTL, will argue the move was anti-competitive.
In a statement, Sky said: “BSkyB has no intention of acquiring shares that would result in BSkyB’s stake exceeding 19.9% or making an offer for the whole of ITV’s remaining share capital.”
Murdoch Jnr said the company intended to be a “supportive shareholder” in ITV, but that BSkyB wanted to “explore options to create value in the interests of both BSkyB’s and ITV’s shareholders”, suggesting possible future collaboration between the two broadcasting giants.
The acquisition of shares was conducted without the prior knowledge of the ITV board. When questioned about the possible NTL/ITV merger (see NTL Telewest Could Merge With ITV) at last week’s IAB Engage 2006 conference, Murdoch remained tight-lipped (see Media Must Adapt To Unprecedented Opportunities And Change).
“The key thing is to try and keep your mouth shut for as long as possible,” he said. “It certainly doesn’t seem to be making it easier to fix either of the challenges on either side… I think the whole industry is waiting to find out a lot more in the next couple of weeks.”
Sky’s move does not completely block NTL’s merger plans, but it will make them more difficult and more expensive. NTL had planned a 130p bid, valuing ITV at around £5 billion. It could now be forced to pay £5.3 billion, what Sky’s acquisition of 17.9% at 135p values the company at.
NTL could still buy 80% of ITV, but Sky will get a say in any final deal and it will get a look into its rival’s business.
NTL merged with Virgin Mobile earlier in the year and is set to be re-branded as Virgin Media in the New Year (see NTL To Become Virgin Media Early Next Year)
In a statement issued this morning, ITV said: “BSkyB has further confirmed its wish to be a supportive shareholder, working constructively with ITV, and exploring options to create value for all shareholders.”
ITV has been without a permanent chief executive since October (see ITV Board To Review Chief Exec Shortlist This Week), with the departure of Charles Allen after 10 years in the post. His position is currently being filled by John Creswell, chief financial officer at the broadcaster, on an interim basis.
It has been reported that RTL, the European television group owned by German media group Bertelsmann and who owns the terrestrial channel Five, will be watching developments at ITV closely.
BSkyB: 020 7705 3000 www.sky.com NTL: 01256 752000 www.ntl.com