Listen to this article
A fierce battle between James Murdoch and Sir Richard Branson broke out on Sunday night, as Virgin Group called for an investigation by the UK’s Office of Fair Trading into British Sky Broadcasting’s £940m ($1.8bn) raid on ITV’s shares.
Sir Richard, the Virgin chairman, urged regulators and politicians “to stand up to reckless and cynical attempts to stifle competition and secure creeping control of the British media”.
BSkyB’s strike on Friday to acquire a 17.9 per cent stake in ITV was seen by many as an attempt to see off a planned £5bn-plus bid for the broadcaster by NTL and Virgin, the cable company’s largest shareholder.
“Sir Richard seems to believe that he and his partners in NTL-Telewest have a unique right to acquire ITV,” BSkyB shot back. “Sky rejects Sir Richard’s assertion that Sky needs to be stood up to.”
Virgin’s campaign began as Ofcom’s policy executive prepared for a meeting on Monday at which BSkyB’s stake-building will top the agenda.
Should the regulator decide there has been a de facto change of control, it would be for Alistair Darling, secretary of state for trade and industry, to decide whether to conduct a public interest inquiry.
ITV was conducting its own inquiry into the regulatory implications of the move as its chairman, Sir Peter Burt, prepared to meet James Murdoch, BSkyB’s chief executive, later this week.
Sir Richard claimed BSkyB had breached the “general merger provision” of the Enterprise Act (2002), designed to prevent any shareholder with more than 15 per cent having “material influence”.
Analysts warned that BSkyB’s shares could fall on Monday, as investors digest the unexpected deployment of close to £1bn of BSkyB’s funds.
Get alerts on Media when a new story is published