Sky plans legal challenge on ITV stake

Sky today confirmed it would launch a legal challenge to a Competition Commission ruling that it must sell most of its share of ITV.

The government body, backed by business secretary John Hutton, told Sky to reduce its holding to less than 7.5%.

Sky will tomorrow formally call on the Competition Appeal Tribunal to overturn the decision.

It argues there were "mistakes at key steps". It disputes firstly that the share purchase constitutes a merger between the two companies and secondly that its holding stops ITV from acting independently and competitively.

"Even if the above findings were tenable, divestment of its shareholding to a level below 7.5% is an unreasonable and disproportionate remedy to the Competition Commission's specific concerns," the company said in a statement to investors this afternoon.

Chief executive Jeremy Darroch said the commission had "built its case on a series of implausible hypotheses and has recommended an arbitrary remedy for a non-existent problem".

Sky had offered to give up its shareholder voting rights and put the shares in an independent trust.

"The reality is that competition in this marketplace is as vigorous as ever," he said. "A merger has not taken place, Sky and ITV are distinct entities with independent strategies and Sky could not block a shareholder resolution without voting rights."