Company disputes merger claim

LONDON — British paybox BSkyB is to challenge the ruling by the government that it must drastically scale down its investment in terrestrial web ITV.

The satcaster will lodge its appeal with the Competition Appeal Tribunal on Friday.

It will argue that the Competition Commission made mistakes at key stages in assessing the case, which led to January’s ruling by business minister John Hutton that BSkyB must reduce its stake from 17.9% to below 7.5%

The Murdoch-backed paybox disputes the commission’s findings that there was a merger between BSkyB and ITV, and that the stake prevents ITV from pursuing an independent competitive strategy.

Even if a merger had taken place and ITV was no longer able to act as an independent competitor, BSkyB will argue that forcing the company to reduce the holding below 7.5% is unreasonable.

BSkyB CEO Jeremy Darroch said: “We believe fundamentally that companies have a right to invest within a transparent framework of competition law.

“The Competition Commission has failed to meet the burden of proof required to justify its conclusions. It has built its case on a series of implausible hypotheses and has recommended an arbitrary remedy for a non-existent problem.

“The reality is that competition in this marketplace is as vigorous as ever.”

BSkyB bought a 17.9% stake in ITV in November 2006 in order to block a takeover bid from arch rival, Virgin Media, forking out around $1.8 billion.

Reducing the holding to below 7.5% would cost the company in the region of $500 million due to a dramatic fall in ITV’s stock price since BSkyB bought into the terrestrial giant.

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