BSkyB’s Acquisition of ITV Under Scrutiny
BSkyB’s acquisition of a 17.9 percent stake in ITV will be investigated by the U.K. Department of Trade and Industry. Alistair Darling, the secretary of state for Trade and Industry, referred the deal to the Competition Commission May 24.
BSkyB acquired a stake in the commercial broadcaster in November for 940 million British pounds ($1.8 billion). The deal had taken place without the knowledge of the ITV board, but BSkyB said it had no intention of acquiring shares that would result in BSkyB’s stake exceeding 19.9 percent or making an offer for the whole of ITV’s remaining share capital.
The investigation, which comes after recommendations by the U.K. Office of Communications (Ofcom) and the Office of Fair Trading, will look at the impact the deal could have on the media climate in the United Kingdom.
"My decision reflects consideration of the reports I have received from both the Office of Fair Trading and Ofcom and of other representations I have received about this matter,” Darling said. “On the basis of the evidence before me, a fuller investigation by the Competition Commission is justified.”
An investigation could take up to six months, with recommened actions taking effect within a year after any decisions, Sarah Simon, a media equity analyst at Morgan Stanley, said in an April 30 research note.