ITV in talks over BSkyB stake

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ITV is in talks with potential investors looking to buy rival BSkyB's controversial 17.9% stake in the broadcaster, it was reported.

Investors including Five owner RTL, Italian media firm Mediaset, Big Brother company Endemol and several US broadcasters have been in contact with ITV executive chairman Michael Grade, the Observer said.

Reports of the discussions come as BSkyB this week expects to hear the outcome of its appeal against a Competition Commission ruling that it must reduce the stake below 7.5%.

Business Secretary John Hutton ordered Sky to sell down the shareholding in January to address competition concerns.

If it loses the appeal, BSkyB may however decide to sell the shares on the open market, or place them with institutional investors rather than selling to one buyer, the newspaper added. ITV was unavailable for comment.

As well as incurring the displeasure of competition authorities, BSkyB's £940 million move in November 2006 also sparked anger from Virgin boss Sir Richard Branson. The intervention put paid to a planned merger between ITV and NTL, which Sir Richard was merging with his Virgin Mobile business at the time.

BSkyB has described the acquisition as a strategic investment, but shares in ITV have since tumbled on fears over the outlook for advertising revenues in an accelerating economic downturn.

Its 17.9% stake in ITV is now worth just £273 million at the current market price.

Last year ITV's annual profits fell 35% to £188 million for 2007, hit by lower revenues at flagship channel ITV1 and increased investment in digital channels.

And in recent weeks the company has seen a host of City analysts mark down their estimates for ITV as potential advertisers cut back on spending in the run-up to Christmas amid mounting economic gloom. The broadcaster also faces tough comparisons with last year when it was boosted by coverage of the Rugby World Cup.


Source: The Press Association

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