James Murdoch has handed his successor at BSkyB, Jeremy Darroch, a seemingly impossible task — hang on to the satcaster’s stake in commercial broadcast giant ITV.
Speculation is increasing that British antitrust regulators will force the paybox to cut its stake from 17.8% to between 5% and 10%.
In November 2006, BSkyB stunned Blighty’s media community when it paid almost $2 billion for the stake.
The acquisition derailed a rival bid for ITV from cable giant Virgin, but pressure on BSkyB has mounted throughout the year to give up or scale back the stock — despite media laws that allow the satcaster to own 20% of ITV.
The Competition Commission is thought to be on the verge of recommending the cut in BSkyB’s ITV stake to the government, according to a report in the Financial Times.
BSkyB is ITV’s biggest single stockholder, but if it cuts its stake to around 7%, it would be roughly in line with the holding of the next largest investor.
The FT reported that both ITV and BSkyB have received guidance from the regulator that it wants the stake reduced to between 5% and 10%. A forced selloff could cost the paybox some $380 million due to the fall in ITV’s stock price in the past 13 months.
The Competition Commission has already ruled that the ITV stake is “against the public interest.”
ITV has said that BSkyB should be allowed to own only a 4.9% stake.