Sky sells contested ITV stake

Steve Dinneen
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BSKYB last night sold the majority of its controversial stake in ITV after a long-running legal battle.

The pay-TV group had been ordered to reduce its shareholding in ITV from 17.9 per cent to 7.5 per cent after rivals complained it was harming competition. Morgan Stanley placed the 10.4 per cent stake, raising around £196m.

Shares in ITV closed down 2.3 per cent at 51p yesterday and Sky’s stake was placed at 48.5p-a-share.

A source close to the sale told City A.M. that no single buyer bought the entire tranche of shares.

And an industry insider said Sky decided not to sell the shares to a single bidder, which could have attracted a premium, in order to prevent one of its rivals launching a takeover bid.

The sale represents a massive loss on Sky’s original £545m outlay, although the firm will post a £119m accounting profit because it has written down the value of the investment over the last two years.

Sky has appealed several times against the ruling that it must sell its shares in ITV. NTL Telewest, which now trades as Virgin Media, was particularly irked by the deal, which it said was a blatant attempt to block its proposed bid for ITV.

Suitors that were thought to be interested in Sky’s stake include Virgin Media and Channel Five owner RTL. But neither party bought shares from Sky yesterday.