BSKYB, the broadcasting empire controlled by Rupert Murdoch, has admitted it will have to write off £343 million after being told to sell more than half of its controversial 17.9 per cent stake in ITV.
John Hutton, the Business Secretary, yesterday ordered BSkyB to take its shareholding to below 7.5 per cent to meet concerns over competition.
And as a result of the decision by the Labour government – once supported by Murdoch's newspapers – BS
kyB now faces steep losses on the ITV stake after seeing the terrestrial broadcaster's share price plummet amid concerns over advertising revenues.
BSkyB's holding is now worth less than two-thirds of the £940m paid in November 2006.
BSkyB confirmed it would have to make the £343m write-down in its half-year results, due out next week. It is estimated that the direct cash loss could total about £250m.
The government has agreed not so specify how long Sky has been given to offload the shares in an apparent concession in the ruling, which follows a recommendation from the Competition Commission.
It is thought that Sky pressed for up to 20 months to complete the share sell-off, while ITV pushed for Sky to have to sell down the stake within three months. Six months is considered the typical time given by competition watchdogs for share divestments.
Sky has until 25 February to appeal against the decision. It refused to comment last night.
Shares in ITV reacted well to news of a quiet sell-off, rising by as much as 3 per cent at one stage, before closing up 2 per cent at 73.5p. BSkyB ended 3.5 per cent firmer at 549.5p.
The full article contains 289 words and appears in The Scotsman newspaper.
