BSkyB ends fight with antitrust regulators

Feb. 8 undertaking a major climbdown for James Murdoch

LONDON -- Satcaster BSkyB Monday gave a formal undertaking to the government to sell part of its 17.9% stake in BSkyB, ending a two-year legal battle with U.K. media and antitrust regulators, who had ordered it to reduce the stake it acquired in November 2006 for almost £1 billion ($1.6 billion).

The move is a significant climbdown for BSkyB chairman James Murdoch -- now chairman and chief executive of News Corp. Europe and Asia -- who paid almost 132 pence (206 cents) per share for the stake.

ITV shares traded down 2% at 51 pence (80 cents) before the news was announced -- after the markets closed.

BSkyB is expected to sell down 10.4% of the stake, after it abandoned a final legal attempt to overturn a ruling by the Competition Commission regulator, which said the stake should be cut to 7.5%.

The satcaster said it accepted that the acquisition had acted against the public interest.

"BSkyB hereby gives to the Secretary of State the following undertakings for the purpose of remedying, mitigating or preventing the effects adverse to the public interest which have resulted from, or may be expected to result from, the creation of the relevant merger situation concerned," the satcaster said, as part of a statement of undertakings to the government. The satcaster is already understood to have held talks with a number of buyers over the sale of the stake and has appointed Morgan Stanley as the sole bookrunner for the divestment. Details of the timing have yet to be announced.

Sky acquired 696m shares in ITV in November 2006, blocking potential merger plans between ITV and Sky's rival NTL, the U.K.'s biggest cable operator. The satcaster has already written down the loss in value of the stake, which was accounted as a £616 million ($961 million) non-cash accounting impairment in the financial year ending July 2008.