Business and Enterprise Secretary John Hutton will tomorrow give his decision on whether BSkyB should be forced to reduce its stake in ITV to below 7.5%. It follows last month’s recommendation by the Competition Commission that BSkyB should reduce its 17.9% holding in the commercial broadcaster acquired in November 2006.
On Friday a research note from Deutsche Bank suggested BSkyB is to take a hit of £340 million on the ITV investment, when it announces its results next week, reflecting recent falls in the broadcaster’s share price. In the 15 months since BSkyB effectively blocked plans by Virgin Media to acquire its own stake in ITV, the value of ITV shares has fallen from 135p to 72.9p. BSkyB has always maintained it is a supportive shareholder in ITV.
The Daily Telegraph reports City law firm Allen & Overy is advising BSkyB on its course of action if as expected Mr Hutton upholds the Competition Commission’s decision. BSkyB would have four weeks to appeal.