BSkyB told to drop out of bid for digital licence

The Independent Television Commission's decision on the future of digital terrestrial television hung in the balance yesterday as BSkyB was told to drop its equity stake in British Digital Broadcasting, one of the bidders for the licences.

The ITC is thought to have informed BSkyB of the news after a "lengthy submission" from the European Commission suggested that it was anti-competitive. BSkyB, which is 40 per cent owned by Rupert Murdoch's News Corporation, shares control of BDB with Carlton Communications and Granada Group. None of the companies would comment yesterday.

It is thought that the satellite operator is attempting to negotiate control of BDB's programming and subscriber management if it is forced to drop its stake.

However, one source said Granada had threatened to withdraw from BDB completely if BSkyB were not a shareholder. If Granada carried out its threat, BDB's bid would in effect be in tatters. The source said the most likely compromise would be for BSkyB to take a reduced stake in the enterprise.

Although some City analysts suggested Carlton would take a 51 per cent stake in BDB, with Granada being responsible for the rest, others said another party would emerge to take on BSkyB's equity commitment. Cable & Wireless Communications was considered the favourite if Granada and Carlton decided not to split BSkyB's pounds 100m burden two ways.

The ITC refused to confirm the reports, despite pressure from the markets as BSkyB's shares plunged 45p to 521.5p yesterday. A spokesman said merely: "We are still talking to both applicants. No decision has yet been taken." Neither BSkyB nor Digital Television Network, the rival bidder for the digital television licences which is backed by the cable company NTL, would comment last night.

A number of commentators expressed the opinion that the ITC had now almost certainly opened itself to judicial review. The ITC has said in the past that applicants would only be justified in seeking legal redress if there had been "an unfair enhancement of the bid".

Industry observers emphasised that judicial action would be unlikely to work against the ITC, with one commenting: "The ITC has an awful lot of power. It can change its own rules but the bidders can't change the rules themselves."

Although the news battered BSkyB's share price, the stock was said to be suffering in part from Tuesday's announcement that the company's top two executives, Sam Chisholm and David Chance, were to step down at the end of the year.

Alastair Smellie, media analyst at ABN Amro Hoare Govett, said that if BSkyB were to withdraw its equity stake, it would not only be good news for the company itself but for the BDB offering. "BSkyB will still be providing programming to BDB. They just won't be putting up funding," he said. "And if DTN win they'll be able to provide programming for them." However, he warned that the move would not benefit Carlton and Granada commercially, although it would boost their share prices.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
election 2015The 10 best quotes of the campaign
News
A caravan being used as a polling station in Ford near Salisbury, during the 2010 election
election 2015The Independent's guide to get you through polling day
News
people
Voices
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month
voicesWhat I learnt from my years in government, by the former Home Secretary David Blunkett
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'