BSkyB makes concessions over ITV stake

James Murdoch

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BSkyB has offered to give up voting rights on part of its controversial 17.9% stake in ITV.

BSkyB has offered to give up voting rights on part of its controversial 17.9% stake in ITV.

The offer is the first concession the satellite broadcaster has made since it purchased the £940m stake last November.

In a letter published by the Competition Commission, Sky proposed that 3% of the stake would be placed with an independent trustee. The trustee would then be allowed to vote the shares in whichever way it chose.

The satellite giant hoped the proposal would allay concerns over its influence on ITV's strategy.

BSkyB bought into ITV almost a year ago, just as cable giant Virgin Media (then NTL) was lining up a takeover of the company. Sir Richard Branson, a major shareholder in Virgin Media, described the move as a “blatant blocking-tactic”.

As a result, the Competition Commission was asked to investigate Sky’s stake in ITV and earlier this month published its provisional findings. Its main concern was that if ITV needed to issue extra shares for an acquisition, Sky had a large enough stake to prevent it.

A spokeswoman for Virgin Media said the cable giant was still calling for a total divestiture of shares. “Shedding 3% still means Sky is the major shareholder,” she said.

Separately, Sky has signed up over one million users to its Sky Broadband service. The milestone was reached less than 14 months after its first broadband customer was connected.

“Sky entered the broadband marketplace because we saw an opportunity to challenge the established players and give customers something better,” said Sky chief executive James Murdoch.