Sharewatch: BSkyB Dips Following Investor Caution

BSkyB saw shares fall by 3.04% yesterday to close at 485žp after Credit Suisse First Boston took a cautious line on weekend advertisements from the satellite broadcaster promoting free installation for Sky Digital packages costing £19.5 or more. CSFB said this could increase BSkyB’s subscriber acquisition costs because in the past the company has offered free installation only for top tier packages.

Meanwhile, GWR, which is in discussion with Capital Radio over a nil-premium merger, saw shares rise by 3.85% to finish at 270p following rumours that Daily Mail & General Trust, which owns nearly 30% of GWR, was pressing for better terms.

Daily Mail & General Trust fell by 0.69% yesterday to close at 177p, while Capital Radio lost 0.11% to close at 436p. Further details of the planned £700 million merger are expected to be announced tomorrow with Capital’s trading update.

Rival radio groups Emap and Scottish Radio Holdings rose by 1.09% and 0.90% respectively ahead of today’s trading updates. However, investors are more interested in speculation that Emap is preparing to mount a take-over bid for for SRH, which owns the Clyde 1 and Forth One stations in Glasgow and Edinburgh.

The closing prices of media company shares on Monday were: