LONDON - Virgin founder Sir Richard Branson is demanding that British and European competition authorities investigate the acquisition of a £940 million ($2.6 billion) stake in national broadcaster ITV by pay-TV operator BSkyB.
The satellite group said it bought the 17.9 per cent holding in ITV on Friday
evening, scuppering a planned takeover of the broadcaster by NTL, the cable group in which Sir Richard has an 11 per cent stake.
"BSkyB's move is a blatant attempt to distort competition even further by blocking any attempt to create a strong and meaningful competitor," Branson said.
"BSkyB is positioned to strongly influence ITV's operations in a manner that favours BSkyB's long-term plans rather than the interests of the other 82 per cent of ITV shareholders who weren't offered a sweetheart deal."
BSkyB said the acquisition would have no effect on competition and it intended to be a long-term shareholder in ITV, although it had no intention of making a takeover bid of its own.
The move makes it impossible for NTL to proceed with its offer. The cable group was relying on offsetting future tax on profits from the proposed enlarged group against £15 billion of historic losses. But it could do so only by owning 100 per cent of ITV.
A merger of NTL and ITV would have created a media powerhouse big enough to challenge BSkyB, which is 39 per cent owned by Rupert Murdoch's News Corporation.
Shares in ITV were expected to fall steeply today when it became clear the company was no longer a takeover candidate.
BSkyB paid £1.35 a share for its ITV stake, compared with the company's closing price on Friday of just under £1.16. It is believed NTL was planning a £1.25 a share bid for ITV.
ITV chairman Sir Richard Burt was told of BSkyB's intentions in a short phone call after the announcement to the stock market had been made.
BSkyB shareholders were not consulted before the £1 billion raid on ITV's shares. It is believed it acquired most of its ITV stake from Fidelity.
Sir Richard obtained his NTL holding after selling Virgin Mobile to the cable company for £962 million.
- INDEPENDENT
