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Branson 'to challenge BSkyB move' Branson challenges BSkyB over ITV
(about 4 hours later)
Sir Richard Branson, NTL's biggest stakeholder, is to challenge BSkyB's move to buy a stake in ITV, according to reports. Sir Richard Branson has called on the Office of Fair Trading to intervene after satellite broadcaster BSkyB bought a stake in ITV.
BSkyB snapped up 17.9% of ITV shares late on Friday - a move widely seen as a way of scuppering a takeover by NTL. BSkyB spent £940m on 17.9% of ITV shares late on Friday - a move widely seen as a way of scuppering a move by NTL to take over ITV.
NTL had earlier said it was in talks with ITV. Sir Richard may now complain to the European Commission, the Office of Fair Trading and regulator Ofcom. Sir Richard, NTL's biggest stakeholder, said BSkyB's move was "a blatant attempt to distort competition".
But a BSkyB director told the Financial Mail the firm had done nothing wrong. But BSkyB has hit back, saying it had done nothing wrong.
'Blatant breach' Ownership restrictions
Sir Richard became a 10.5% shareholder in NTL when he sold Virgin Mobile to the firm earlier this year. Sir Richard said he may also complain to the European Commission and regulator Ofcom.
Reports say he will argue that BSkyB's move is in breach of competition laws. He became a 10.5% shareholder in NTL when he sold Virgin Mobile to the firm earlier this year.
His spokesman Will Whitehorn told the Sunday Times that BSkyB had taken a stake in ITV "in order to prevent a transformational deal that would have increased competition in the UK". Earlier this month, NTL said it had approached ITV about combining the two companies. The offer was reported to be more than £5bn.
Sir Richard seems to believe that he and his partners in NTL have a unique right to acquire ITV BSkyB
"BSkyB's move is a blatant attempt to distort competition even further by blocking any attempt to create a strong and meaningful competitor," Sir Richard said.
"BSkyB is positioned to strongly influence ITV's operations in a manner that favours BSkyB's long-term plans rather than the interests of the other 82% percent of ITV shareholders who weren't offered a sweetheart deal on Friday."
Current UK media ownership rules mean the satellite broadcaster is prevented from controlling more than 20% in ITV.
And BSkyB said that because its stake was below this threshold, it was entitled to invest.
"Sir Richard seems to believe that he and his partners in NTL-Telewest have a unique right to acquire ITV," a company statement said.
'Legal advice'
Mr Branson's spokesman, Will Whitehorn, said earlier that that BSkyB had taken a stake in ITV "in order to prevent a transformational deal that would have increased competition in the UK".
"This is a blatant breach, if not of the broadcasting legislation, then of the Enterprise Act," he said."This is a blatant breach, if not of the broadcasting legislation, then of the Enterprise Act," he said.
Mr Whitehorn added that BSkyB - which is 39% owned by Rupert Murdoch's News Corporation - had made it clear it "did not intend to be a passive investor".Mr Whitehorn added that BSkyB - which is 39% owned by Rupert Murdoch's News Corporation - had made it clear it "did not intend to be a passive investor".
But an unnamed BSkyB director told the Financial Mail it had taken large amounts of legal advice before amassing the stake in ITV.But an unnamed BSkyB director told the Financial Mail it had taken large amounts of legal advice before amassing the stake in ITV.
"We are confident we are protected against any Branson-style attack," he said."We are confident we are protected against any Branson-style attack," he said.
Leaderless Earlier reports suggested Germany's RTL may also make a bid - though those rumours appear to have cooled.
NTL approached ITV about a merger last week, and reports suggest Germany's RTL may also make a bid.
Analysts have interpreted BSkyB's move as being an attempt to have control over who ultimately owns ITV.
ITV has been under pressure after being hit by declining advertising revenue. It is also without a chief executive.ITV has been under pressure after being hit by declining advertising revenue. It is also without a chief executive.
The Communications Act of 2003 would not allow BSkyB to own more than 20% of ITV.