U.K. Pay-TV group British Sky Broadcasting PLC (BSkyB) has confirmed that it is bowing out of its long-running attempt to keep a 17.9% stake in broadcaster ITV PLC (ITV.LN) which it had bought in 2006 for £940million.

Since 2007 BSkyB has been involved in a legal challenge to a ruling by the U.K. antitrust authority, the Competition Commission, that it must reduce its share in ITV to just 7.5%. When BSkyB completed the purchase in 2006 they effectively blocked cable group NTL, now rebranded as Virgin Media, from buying ITV in order to create a larger and more powerful company that would have the ability to compete with BSkyB.

A very public battle then ensued between then-chief executive James Murdoch, and Virgin Media's Richard Branson, and the matter was finally referred to the Competition Commission in 2007. The Commission ruled that the shareholding was anticompetitive because it allowed them to exert influence on ITV, and the decision was upheld in a number of appeals.

It is expected that BSkyB will lose approximately £740million upon sale of the shares which have greatly reduced in value since 2006.

Drew Nesbitt, a solicitor specialising in Commercial law at Wilson Nesbitt solicitors in Belfast, Northern Ireland, commented that "the governments move to protect the consumer from any anti competitive influence that BSKYB could exert on ITV through section 45 of the Enterprise Act 2002 is commendable.  The losses suffered by BSKYB highlight the need for Companies to take care during any acquisition process and to give due attention to their regulatory environment."


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