BskyB buys 17.9% of ITV

He did own a stake in LWT, it was this investment that saved the company after a very dodgy start.

If it wasn't for Rupert Murdoch, LWT would have gone bust

STV's well-documented problems (debt, pension deficit) are the main reason that they are not under the control of an English company.

But if ITVplc took them over (no way anyone else, NTL, RTL or BSkyB included would get involved), it would simply be a case of a further two licences swallowed up.

As an addendum, it seems that Murdoch bought out the entire holdings of both Fidelity and Brandes. The latter have no holding whatsoever in SMG - but the former is the Scottish broadcaster's largest stakeholder. It remains to be seen if it is prepared to dispose of their SMG shares if they can obtain a, say 20% premium at current prices.

Remember, the Scottish tranche of Border is already under the control of ITV - and the Nationalists cannot really do anything about this.

A strange paradox exists here though - Sky cannot hold (buy) any more than 20% of SMG shares - yet there is nothing to stop ITV buying them out completely. If this happened (highly unlikely), they would effectively gain a 17% share of SMG (and UTV for that matter should ITV be interested) "for free".

They can only buy upto 20% of ITV too!

if NTL get in to bed with ITV< I take it SKY would own 20% of NTL?

can't them make sure that the 20 %is on the ITV side?

If NTL bought ITV then they would own up to 82.1% of ITV. NTL would own the majority of ITV giving them full control. Sky would simply be a shareholder, they would get a very small amount of NTL if they decided to merge fully with ITV rather than just being the owners.
NTL wouldn't like that at all so they would want to buy Sky's 17.9%, meaning Sky would sell there shares at a sky high price, Sky are just in this for the money.

Complicated stuff hey!

I wish I had spare £950million then I could make some money!

NTL would probably have to takeover ITV rather than merge.


If they merged that would give Sky a stake in it's biggest rival - and that shouldn't be allowed!

ITVplc has a sharee in STV, therefore by holding a share in ITVplc BSKB has a stake in STV.

form:wikipedia

The Murdoch Years

In 1969, LWT founder David Frost interviewed Australian media owner Rupert Murdoch in what was ITV's first live colour transmission. In the interview, Murdoch was slated for the sensationalist reporting style of his UK newspapers, and when the show was over, an incandescent Murdoch vowed to buy the station. Within a year he got his wish, buying existing shares and financing a new share issue, which gave him a controlling interest. Immediately, he set about dismissing existing board members, and changing schedules and programme ideas. Although it made him unpopular within sections of LWT, audience share began to grow and, albeit slowly, so did income and profits.

However, Murdoch's presence rang alarm bells at the ITA, who expressed concern that a foreign national, and owner of significant British newspaper interests, could own a British television station. A discreet but effective ultimatum was given: Murdoch had to sell up, or LWT would have its licence revoked. The ITA won, and in 1971, Murdoch left.

ITV have a 16% shareholding in SMG at this moment in time - therefore you are correct to assert that BSkyB have a 17.9 stake in this 16% holding.

Of course, this all depends on ITV retaining this holding - if someone were to offer them 75 - 80 pence for each of their SMG shares, they would bite the buyer's hand off!

Ofcom is to investigate Sky's acquisition of a stake in ITV, due to fears it could lead to a change of control at ITV, and its possible effects on public service broadcasting and programme investment.

More at media guardian

BSkyB's whole intention is to block ntl:Telewest's merger with ITV. The cannot raise the necessary finance if they can't get full control of the company (ie merge rather than a major holding). ntl:Telewest is debt-ridden as it is, the City won't stump up the cash for anything less than a full merger.

BSkyB simply want to prevent the creation of a big-player on a rival platfrom at the moment. The minute someone else comes along (RTL for example, or a US bidder) they will sell their stake and allow a takeover of ITV plc.

If no other buyer comes along, another option for BSkyB is for News International to sell their newspapers (Sun, Times, Sunday Times etc) and then buy the whole of ITV, which they would then be allowed to do.