Virgin welcomes Darling's decision on Sky
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Virgin Media has welcomed trade secretary Alistair Darling's decision to order an investigation into whether BSkyB's surprise purchase of a 17.9% stake in ITV in November is in the public interest. Virgin Media CEO Steve Burch said the cable operator—which, under its previous guise as ntl sought to merge with ITV—was "gratified" that Darling had ordered the Ofcom probe.
Virgin Media's largest shareholder, Sir Richard Branson, blamed Sky's shares purchase for ITV's rejection of ntl's merger offer. Ofcom's probe—this is the first public interest investigation ever conducted under the Communications Act 2003—will run in parallel with an inquiry into competition issues, being conducted by the Office of Fair Trading. Last month in a preliminary ruling the OFT said the stake purchase may have resulted in a de facto merger.
Ofcom is already investigating whether Sky's stake amounts to a change of control which could "affect ITV's ability to meet its public service targets". Darling has given both Ofcom and the OFT until April 27 to complete their inquiries.
Announcing the intervention in the Commons, Darling stressed he was asking Ofcom to conduct an "initial investigation into the public interest issues" raised by Sky's stake purchase. Sky paid £940m for the shares, at a 16.6% premium, making it ITV's largest shareholder.
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