Sky sells ITV stake
February 10, 2010
From Colin Mann in London
BSkyB has confirmed that it has disposed of a shareholding of approximately 10.4 per cent in ITV plc in accordance with the final undertakings given by Sky to the Secretary of State for Business, Innovation and Skills relating to Sky's 17.9 per cent investment in ITV. It was unsuccessful on January 21st with the fourth appeal it had made against a Competition Commission ruling that it must sell down its shareholding to less than 7.5 per cent.
The placing by Sky of 404,362,095 ITV shares with Morgan Stanley Securities Limited at 48.5 pence per ITV share resulted in aggregate consideration of approximately £196 million, which equates to a loss of some £348 million. The majority of the shares are understood to have been acquired by institutional investors, with suggestions that new Chairman Archie Norman and Chief Executive designate Adam Crozier increasing their stakes.
Sky said that it intends to retain its residual 7.5 per cent investment in ITV for the medium term and to remain a committed shareholder of ITV. It bought the stake for £940 million in November 2006, effectively blocking NTL, now Virgin Media, from buying ITV. BSkyB's shares were purchased at 135 pence, but the intervening years saw ITV’s share price drop to a low of less than 20p. BSkyB has already accounted for the loss in value of the last 18 months, in July 2008, writing down the value of the stake by £616 million in a non-cash accounting impairment charge, and in 2009, reporting a £191 million writedown.
ITV shares closed down 2.3 per cent at 51.3 pence before the announcement. BSkyB itself closed flat at 524.5 pence.