BSkyB offers to cede ITV voting rights
EmptyLONDON -- U.K. pay TV firm British Sky Broadcasting has offered to give up some voting rights from its 17.9% stake in free-to-air broadcaster ITV after a regulator said the holding restricted competition.
But lawyers were skeptical Monday that the offer would do enough to appease the Competition Commission, which said this month that BSkyB could be forced to sell some or all of its stake.
The commission has said previously that a behavioral remedy, such as reducing voting rights, was unlikely to be appropriate or an effective way of addressing the situation, but it would consider all suggestions.
In a response published on the Competition Commission's Web site, BSkyB said it could place voting rights for 3% of ITV in a voting trust with a respected institutional trustee.
"The remaining shareholding of 14.9% is clearly insufficient, on any reasonable basis of calculation, to block a special resolution," BSkyB said.
Competition lawyer Anthony Woolich, a partner at LG, said the offer was a sensible move by BSkyB but he did not think they could yet be confident about the outcome.
Becket McGrath, formerly with the Office of Fair Trading and now a competition lawyer and partner at Berwin Leighton Paisner, said it was too hard to predict at this stage whether the commission would accept that the proposal goes far enough.
The commission has said possible remedies will include a full divestiture of the stake, a partial divestiture or behavioral remedies to accompany a partial divestiture.
Previous partial divestiture remedies in Britain have forced investors to reduce their stakes to below either 10% or 15%.
Britain's dominant pay TV firm, BSkyB spent 135 pence per share or 940 million pounds on its stake in ITV last November in a move that effectively blocked cable group NTL -- since relaunched as Virgin Media -- from buying ITV.
ITV has pointed out that BSkyB could block decisions as not all ITV shareholders turn out to vote, while Virgin Media has called for BSkyB to sell its whole stake to restore competition.
The commission plans to send its final report to John Hutton, the secretary of state for business, by early December.