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Last Updated: Thursday, 21 February 2008, 20:30 GMT
BSkyB legally opposes ITV ruling
Sir Trevor McDonald and Julie Etchingham
The regulator was concerned BSkyB could influence decisions at ITV
BSkyB is to mount a legal challenge to the Competition Commission's decision forcing the firm to reduce its stake in rival broadcaster ITV.

BSkyB was told by the commission to cut its holding in ITV from 17.9% to below 7.5%. The government backed the ruling.

The commission said that BSkyB's stake thwarted competition and allowed it unfair influence over ITV.

BSkyB is to apply to the Competition Appeal Tribunal (CAT) on 22 February, appealing against the findings.

On 17 November 2006, BSkyB announced that it had spent 940m buying 17.9% of ITV, but ITV's share price has dropped since then.

If BSkyB, which is 39% owned by Rupert Murdoch's News Corp, is forced to reduce its ITV stake it could lose about 250m.

"We believe fundamentally that companies have a right to invest within a transparent framework of competition law," said BSkyB chief executive Jeremy Darroch.

He said BSkyB and ITV were "distinct entities with independent strategies".


In April 2007, the Office of Fair Trading reported that BSkyB's acquisition of its stake in ITV shed doubt on the independence of ITV, prompting the Competition Commission to launch a probe.

The deal effectively prevented cable operator NTL - which has since been renamed Virgin Media - from launching a takeover bid for ITV.

Virgin boss Sir Richard Branson, consumer groups and the regulator Ofcom all opposed the purchase.

BSkyB is to argue that forcing it to reduce its ITV stake is unreasonable and a disproportionate remedy - particularly as BSkyB had said it would surrender its voting rights.

Shares in BSkyB ended 2.2% higher and ITV shares also climbed, rising 1.7%.

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