BSkyB, Rupert Murdoch’s U.K. pay TV giant, has lost an appeal to keep its entire 17.9% stake in ITV, Blighty’s biggest commercial web.
In a ruling published Monday, the Competition Appeal Tribunal said the satcaster must cut its stake to under 7.5%.
This means the News Corp. platform faces a £650 million ($1.7 billion) loss on its investment, made by BSkyB’s then-CEO James Murdoch in November 2006, when he derailed a Virgin Media bid for ITV.
Previously, the Competition Commission had said BSkyB’s stake undermined competition in the sector and allowed it unfair influence over ITV.
BSkyB said in a statement it would “review the judgment carefully and decide on the next steps.”
The paybox could launch another appeal to the House of Lords, the U.K.’s final court of appeal, or to the European Court of Justice.
But with ITV’s stock closing at an unimpressive 76¢ in London on Monday — Murdoch forked over $2.49 a share — it is in BSkyB’s interests to delay the sale for as long as possible. It is thought the paybox has been given around six months to offload the stock.
In a stronger economic climate, potential bidders for BSkyB’s stake in ITV would likely be queuing up, but with the global credit crunch an immediate bid is unlikely.
However, analysts suggest that either a trade buyer or a private equity bid may emerge. Those reported to be interested include pan-European broadcast giant RTL, which owns Five in the U.K.; Italy’s Mediaset; Endemol, which is partly owned by Mediaset; and even Disney.
In a statement, ITV welcomed the Competition Appeal Tribunal judgment.