BSkyB is to be forced to sell its stake in public broadcaster ITV to below 7.5% by the court of appeal. SkyÂs appeal on competition issues is dismissed, so the direction that it must reduce its shareholding to less than 7.5% will stand,Â the court ruled.
The news means the UK pay-TV operator will face the potential loss of Â£500m (Â575m) after ITV shares tumbled since Sky bought a 17.9% stake for Â£940m in November 2006. This is the fourth ruling since Sky acquired the stake and leaves the company with the only option of appealing directly to the Supreme Court, which it must do within 28 days.
ÂBSkyB notes the decision by the court of appeal in relation to BSkyBÂs shareholding in ITV. We will review the judgment and order carefully and consider next steps in due course,Â the operator said in a statement.
Sky argued that it was not breaking UK competition rules because its stake was below 20%. The acquisition was widely seen as a tactical move to prevent a merger between cable operator Virgin Media (then NTL) and ITV.
The decision is unlikely to surprise Sky, which has already factored in the loss from selling the stake into its accounts. The operator is also understood to have approached potential buyers for the stake, according to UK press reports.