Sky has invested in ITV because ITV is a quality company and an important part of the entertainment landscape in the UK. Sky has made a constructive approach and intends to support the ITV Board as it puts the best new leadership in place and develops a strategy to grow and develop.
Subject to the 20% limit considered by Parliament to be appropriate under the Communications Act (and Broadcasting Acts before that), Sky is as entitled as any of the other parties who have shown interest in ITV to make an investment in shares which it considers to be of greater long-term value than the price at which they were purchased. Sky is not alone in considering that ITV’s shares offer long-term value. A range of shareholders, including Sky, share the view that there is value above the price at which Sky made its investment last Friday.
Sky has made clear that it wishes to support the Board of ITV in its continuing stewardship of the company. As Sky said it does not intend to seek a seat on the ITV Board. Sky’s investment in ITV does not enable it to exercise material influence over ITV’s policy and operations and hence is not a merger under UK merger rules.
With regards to today’s statement from Sir Richard Branson and Virgin Group, which is a minority shareholder in the NTL-Telewest cable company, Sir Richard seems to believe that he and his partners in NTL-Telewest have a unique right to acquire ITV. His reference in a statement today to the price we have paid for our investment simply suggests to us that he would rather pay a lower price.
The right thing for the ITV Board now is to put in place strong, new leadership and for that leadership to set a clear strategic direction for the company.
Finally, Sky rejects Sir Richard’s assertion that Sky needs to be stood up to. In its short history, Sky has increased competition in the fast changing media and now broadband and telephony sectors and has consistently been first at giving consumers more choice in entertainment and a wide range of innovations that they enjoy.