Branson furious; threatens legal challenge
LONDON — ITV’s stock price has begun to rally following an initial dip in response to BSkyB’s audacious purchase of nearly a fifth of the troubled terrestrial broadcaster’s stock.
In opening trading today ITV’s stock fell to 108 pence (205 cents) but the price later recuperated to 114.50 (217 cents) as the City of London digested the impact of Friday evening’s BSkyB stock swoop.
BSkyB’s CEO James Murdoch paid 135 pence (256 cents) a share for a 17.9% slice of ITV, shelling out $1.78 billion.
The move has infuriated Virgin topper Richard Branson, who prior to Murdoch’s intervention had hoped to buy ITV via U.K. cable giant, NTL, in which he is the biggest shareholder.
But most analysts reckon the NTL bid is dead in the water, although they do not rule out further bidders for ITV emerging in due course.
Media analyst Paul Richards at Numis Securities said: “We were always luke warm on the NTL ap-proach because the synergies weren’t all that obvious and because of NTL’s high level of debt.
“Now that BSkyB has emerged as a significant investor in ITV, there is little chance of the merger succeeding.”
But Branson, who has long wanted to be a player in ITV, accused BSkyB of a cynical attempt to control the British media and said Murdoch Jnr.’s initiative was bad for Blighty’s TV industry and its audiences.
He said: “This move is seriously damaging to the interests of viewers, program-makers, artists and shareholders and the time has come for regulators, politicians and consumers to finally show that they’re willing to stand up to reckless and cynical at-tempts to stifle competition and secure creeping control of the British media.”
However BSkyB retorted: “In its short history Sky has increased competition in the fast-changing media and now broadband and telephony sectors and has consistently been first at giving consumers more choice in entertainment and a wide range of innovations that they enjoy.”
NTL is to be rebranded as Virgin Media in the New Year in the hope that association the Virgin brand will enable NTL to compete more effectively against BSkyB.
It remains to be seen if Branson takes the issue to regulators.
Legally BSkyB is allowed to own up to 19.9% of ITV.