Richard Gwinne, counsel for Granada, said,"We have always said this case has no merit and is without foundation." So far, no attempts have been made to settle out of court. Late last year, however, LMS tried to halt the £4.5bn flotation of BSkyB by claiming that it would prejudice the court action. The attempt failed.Reuse content
The controversial merger of Rupert Murdoch's Sky Television and its former rival, British Satellite Broadcasting, is set for fresh scrutiny in the high courts tomorrow. In a case that could last up to 12 weeks, Granada, Pearson, Chargeurs and Reed International will face allegations that they unfairly diluted the stake of one of their minority BSB partners after the 1991 merger. London Merchant Securities, which is bringing the case, has less than one percent in BSkyB. But in compensation for the alleged "unfair prejudice to a minority shareholder" it wants either five per cent in BSkyB or damages of around £170m. Originally the property and investment group had five per cent of BSB. Now it claims it was denied the opportunity to maintain that level of equity in BSkyB during the re-financing rounds which followed the merger. BSB shareholders have insisted throughout the three year dispute that LMS's action had no merit. Nevertheless, five to eight weeks have already been set aside by the courts and Mishcon De Reya, acting for LMS say the case could last up to three months. All the leading players including Alex Bernstein, chairman of the Granada Group and Pearson's chief executive, Frank Barlow, are scheduled for cross examination.