Sky launches new appeal over ITV stake
Friday, October 30 2009,
Sky has launched a new appeal against a Competition Commission ruling that it must reduce its 17.9% stake in ITV.
Yesterday, the satellite operator lodged a fresh appeal in a London court against the commission's review, which it believes lacked sufficient rigor to justify the ruling, reports Reuters.
Back in 2006, Sky became the largest shareholder in ITV after purchasing 696 million shares for £940m. At the time, there were suggestions that the purchase was a blocking move to prevent ITV joining up with Sir Richard Branson's Virgin Group, containing cable operator NTL, now Virgin Media.
A year later, ITV executive chairman Michael Grade expressed concern that Sky's stake in the broadcaster may not be in the interests of ITV's shareholders.
The Competition Commission subsequently ruled in 2008 that Sky's holding must be reduced to 7.5%, with the firm immediately lodging an appeal against the decision to the Competition Appeal Tribunal (CAT).
According to Sky, the commission's consultation on the case made "mistakes at key steps leading to the divestment decision".
The company also dismissed notions that its investment signalled a merger between Sky and ITV, or that the commercial public service broadcaster was unable to pursue an "independent competitive strategy" under the new arrangement.
CAT now has the power to rescind all or part of the commission's ruling and refer the case back for further consideration.