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Last Updated: Sunday, 19 November 2006, 18:28 GMT
Branson challenges BSkyB over ITV
Sir Richard Branson
Sir Richard said BSkyB wanted to "strongly influence" ITV
Sir Richard Branson has called on the Office of Fair Trading to intervene after satellite broadcaster BSkyB bought a stake in ITV.

BSkyB spent 940m on 17.9% of ITV shares late on Friday - a move widely seen as a way of scuppering a move by NTL to take over ITV.

Sir Richard, NTL's biggest stakeholder, said BSkyB's move was "a blatant attempt to distort competition".

But BSkyB has hit back, saying it had done nothing wrong.

Ownership restrictions

Sir Richard said he may also complain to the European Commission and regulator Ofcom.

He became a 10.5% shareholder in NTL when he sold Virgin Mobile to the firm earlier this year.

Earlier this month, NTL said it had approached ITV about combining the two companies. The offer was reported to be more than 5bn.

Sir Richard seems to believe that he and his partners in NTL have a unique right to acquire ITV
BSkyB

"BSkyB's move is a blatant attempt to distort competition even further by blocking any attempt to create a strong and meaningful competitor," Sir Richard said.

"BSkyB is positioned to strongly influence ITV's operations in a manner that favours BSkyB's long-term plans rather than the interests of the other 82% percent of ITV shareholders who weren't offered a sweetheart deal on Friday."

Current UK media ownership rules mean the satellite broadcaster is prevented from controlling more than 20% in ITV.

And BSkyB said that because its stake was below this threshold, it was entitled to invest.

"Sir Richard seems to believe that he and his partners in NTL-Telewest have a unique right to acquire ITV," a company statement said.

'Legal advice'

Mr Branson's spokesman, Will Whitehorn, said earlier that that BSkyB had taken a stake in ITV "in order to prevent a transformational deal that would have increased competition in the UK".

"This is a blatant breach, if not of the broadcasting legislation, then of the Enterprise Act," he said.

Mr Whitehorn added that BSkyB - which is 39% owned by Rupert Murdoch's News Corporation - had made it clear it "did not intend to be a passive investor".

But an unnamed BSkyB director told the Financial Mail it had taken large amounts of legal advice before amassing the stake in ITV.

"We are confident we are protected against any Branson-style attack," he said.

Earlier reports suggested Germany's RTL may also make a bid - though those rumours appear to have cooled.

ITV has been under pressure after being hit by declining advertising revenue. It is also without a chief executive.


SEE ALSO
Q&A: ITV, BSkyB and NTL
20 Nov 06 |  Business
BSkyB snaps up 17.9% stake in ITV
17 Nov 06 |  Business
RTL 'planning 5bn bid for ITV'
17 Nov 06 |  Business
NTL reveals ITV merger interest
09 Nov 06 |  Business

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