Apparently not content with the recent ruling which could potentially see rivals Sky taking a multi million pound hit, Virgin Media are to appeal against the recent decision taken by the Business Secretary which sees Sky cutting the size of their stake in ITV to 7.5 per cent; Virgin believe that Sky would still have too much influence over ITV even at a reduced level:
Virgin said in a statement that “the Competition Commission has made significant errors in interpreting and applying” the rules of the Enterprise Act of 2003, and that “If not corrected, this error will undermine the future efficacy and objectives” of the act.
Meanwhile, Sky have submitted their own challenge to the ruling, arguing that the case was founded “on a series of implausible hypotheses” and that “competition in this marketplace is as vigorous as ever – a merger has not taken place, Sky and ITV are distinct entities with independent strategies and Sky could not block a shareholder resolution without voting rights.”
Sky will argue that because the size of their current stake, 17.9 per cent, is too small to constitute a takeover, the Competition Commission should not have got involved. Sky apparently offered to rid itself of any voting rights on the ITV board via a trust, but this measure was rejected by the commission. Sky had offered to either place shares in a voting trust, or agree to not exercising its voting rights, described by the commission as a “behavioural remedy”, which was ultimately rejected.
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