Outlook: Granada

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FOR CHOICE, would have stayed with its investment in BSkyB a while longer. Gerry Robinson, chairman of and until recently of Sky too, has always believed Sky's prospects in the digital age to be fabulous, and furthermore, that its share price was failing to recognise that potential. If he thought that two years ago when Sky's shares were worth over 50 per cent more than they are now, it might be asked, what's he doing selling at this price?

One reason is the obvious one - that the sale has to some extent been forced on . This is not because the company needs the money. has delivered on all its promises at the time of the Forte takeover for asset disposals, and debt gearing is now at a reasonably comfortable level. Rather it is because holding the stake was beginning to create a severe conflict of interest, given than is also a 50 per cent shareholder in ONdigital, the competing digital platform for subscription TV.

With ONdigital about to go live, the two will be head to head in competition not just for subscribers, but for programming too.

So this is an entirely logical step, strategically, even though by holding on might eventually have got a better price. In any case, everything is relative when it comes to stock market valuation. Just as 's shares have plummeted in the stock market collapse of the last three months, Sky's have held up remarkably well, outperforming the rest of the market by 23 per cent. In relative terms, then, is doing quite well out of the sale. Furthermore, by cutting borrowings by pounds 429m, the sale will lead to a pounds 30m a year saving in borrowing costs, and therefore be earnings enhancing.

However, the biggest winner in all this must be BT Alex Brown. This is one of the largest bought deals ever, and to have pulled that off in these markets, taking a 4p a share turn on the transaction in the process, can reasonably be described as quite a coup.