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BSkyB sells down ITV stake

UK pay-TV provider BSkyB has divested the 10.4% stake in commercial broadcaster ITV that it was obliged to sell by the Court of Appeal in a placement with Morgan Stanley Securities.

Sky has placed 404,362,095 shares with Morgan Stanley Securities at a price of 48.5p a share, slightly below ITV’s closing share price before the announcement, giving it £196m (€224m). The pay-TV operator said it would retain the residual 7.5% stake in ITV in the medium term and said it remained “a committed shareholder of ITV”.

The sale, which results in a loss of about £350m to the operator, brings to an end Sky’s two year-long struggle to retain its stake in ITV. Sky decided not to exercise its option to appeal the case to the Supreme Court.

Sky acquired a 17.9% stake in ITV in 2006 for £940m, representing 135p a share, a move that was widely seen as designed to prevent a merger between cable operator NTL (now Virgin Media) and the commercial broadcaster.

Sky has already written down the value of the stake in anticipation of a forced sale.