Competition Commission report on BSkyB / ITV

Competition Commission report (97 pages, PDF and appendices) on BSkyB's shareholding in ITV plc. The report recommends (to the Secretary of State, who is the decision maker on remedies in this case) that Sky be required to reduce its shareholding to 7.5 per cent (from 17.9 per cent). This figure is calculated such that Sky would be unable to block a special resolution even with the active support of another 7.5 per cent shares and with a 40 per cent abstention rate, and does not take account of Sky's potential ability to prevent a "squeeze out" of shareholders if ITV was acquired by someone else.

Sky's proposal to give undertakings or cede control over future voting behaviour for some of its shares are rejected as follows:

6.50 ... Even if BSkyB did not retain any voting rights, other shareholders could still attach additional weight to BSkyB’s views on ITV’s strategy, as a result of its substantial economic interest in ITV. Further, as set out in paragraph 4.117, by retaining its economic rights relating to a 17.9 per cent shareholding, BSkyB could have the opportunity to influence the course of any future transactions involving ITV, since it would, for example, still be able to choose whether to sell its shares to a third party.

For further information or advice please contact Franck Latrémolière.

Filed under BSkyB, Competition Commission, DTI/BERR, Media, Merger control.

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