BSkyB sells ITV shares
09/02/2010 - 09:08:28Broadcasting giant BSkyB has suffered a near-£350m (€397.64m) hit after selling a 10.4% stake in ITV and admitting defeat in a long-running legal battle.
Sky offloaded 404 million shares at 48.5p each - totalling £196m (€222.7m) - after last month's decision by the British Court of Appeal to uphold the UK government ruling that it must sell down its 17.9% stake.
The group originally spent £940m (€1.1bn) on the stake in November 2006, snapping up the shares at 135p each - a move that scuppered plans by the then NTL, since rebranded Virgin Media, to takeover ITV.
Sky, which fought a three-year tussle to keep the controversial holding, conceded defeat after reportedly being told by legal experts that its chances of winning an appeal were slim.
The group retains a 7.49% stake in ITV - the maximum it is allowed to hold following a Competition Commission judgment that it must reduce its stake to below 7.5% due to concerns about undue influence over ITV.
Sky's original shares raid took the market by surprise and infuriated major NTL shareholder Richard Branson.
However, Sky has always maintained it intended to be a long-term investor in ITV and sought to keep the stake through three appeals processes.
The Commission's ruling came at a bad time for Sky, with ITV shares having slumped to historic all-time lows since it first acquired the holding - although the stock has recovered marginally in recent months.
Sky has already written down the value of its stake in ITV by around £800m (€908.9m) and it is expected the price achieved for the shares will see it book a small exceptional gain in full-year accounts.
It said after the sale last night: "Sky intends to retain its residual 7.5% investment in ITV for the medium term and to remain a committed shareholder of ITV."
Morgan Stanley, through which Sky placed the shares, has declined to reveal the identity of the buyers, but they are understood to be large institutional investors.
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