BSkyB to appeal ITV stake sale ruling

Britain's BSkyB is to launch a legal challenge against the Competition Commission's decision to force the pay-TV operator to sell down its stake in rival broadcaster ITV.

BSkyB said it would lodge its application with the Competition Appeal Tribunal (CAT) to appeal against the key conclusions from the Commission which were subsequently backed by the government.

BSkyB will argue that the Commission made mistakes at key steps of its investigation, including its decision that a merger had occured between the two companies and that the investment prevented ITV from pursuing an independent competitive strategy.

It will also argue that the order to reduce the 17.9 per cent stake to below 7.5 per cent was an unreasonable and disproportionate remedy, especially as BSkyB had offered to give up all its voting rights.

The commission had said the stake hindered competition. "We believe fundamentally that companies have a right to invest within a transparent framework of competition law," BSkyB chief executive officer Jeremy Darroch said in a statement.

"A merger has not taken place, Sky and ITV are distinct entities with independent strategies and Sky could not block a shareholder resolution without voting rights."

BSkyB, which has Rupert Murdoch's News Corp as its largest shareholder, said the appeal tribunal had the power to quash part or all of the previous findings and send the case back to the Competition Commission for further consideration.

BSkyB paid 135 pence per share, or £940 million, for its stake in November 2006, effectively blocking cable group NTL - now part of Virgin Media - from buying ITV.