ITV urges forced sale of BSkyB stake
EmptyLONDON -- Satellite pay TV firm British Sky Broadcasting should be forced to sell its 17.9% stake in ITV, the broadcaster has told anti-competition regulators.
"The only effective and comprehensive remedy is a complete divestment," ITV said in a submission posted on the Competition Commission's Web site, www.competition-commission.org.uk.
BSkyB spent 135 pence per share or 940 million pounds ($1.8 billion) on its stake in ITV last November in a move that effectively blocked cable group NTL -- since relaunched as Virgin Media -- from buying ITV.
The price was at a 17% premium at the time of the deal and on Wednesday ITV's shares were trading even lower at 93 pence ($1.96).
The Competition Commission is investigating the move and will report to the government towards the end of this year.
ITV said it was concerned that "any meaningful shareholding in BSkyB's hands would give it the ability ... to lead a blocking group of shareholders or to act as the swing vote and in that way to exert influence over ITV."
ITV said it had a wide range of investment proposals such as acquisitions and strategic joint ventures for its content production business in the next few years. It also cited an auction for spectrum where the two companies could clash.
The leading commercial free-to-air broadcaster said it did not believe a small reduction to say 14.9% would be an effective remedy but a drop to 4.9% -- with a restriction on any board seats being sought -- would start to address its concerns.
BSkyB has offered to give up some voting rights from the stake after the commission said it restricted competition.
BSkyB said it would only take a "relatively small reduction" in its voting powers, or 3%, to make ITV confident it could not block any special resolutions.
But 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, though it would consider all suggestions.
Previous partial divestiture remedies in Britain have forced investors to cut their stakes to below either 10% or 15%.
The commission has to send its final report on the BSkyB stake in ITV to the government by Jan. 2 though it has said it aims to do this in December.