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Sky in 17.9 per cent ITV tie-up

17/11/2006

Satellite operator British Sky Broadcasting (BSkyB) has announced that it has bought a 17.9 per cent stake in troubled commercial broadcaster ITV for £940 billion.

However, the company emphasised that it had no intention of acquiring beyond 19.9 per cent worth of shares or a controlling interest in ITV.

A statement this evening from BSkyB insisted that the purchase of 696 million shares at a price of 135p each is based on ITV's "substantial potential for long-term value creation".

Newspaper reports this morning linked ITV, Britain's largest commercial television firm, to European operator RTL, with merged cable company NTL also in the running to table a takeover bid.

ITV has been hit by declining advertising revenues; earlier this week losing one of its main sources of revenue when Cadbury ended its annual £10 million sponsorship deal with Coronation Street.

The company has also been without a chief executive since Charles Allen's exit this autumn.

But BSkyB said this evening that it wished to "explore options to create value in interests of both BSkyB's and ITV's shareholders", dubbing its investment as one of "Europe's premier broadcasting and production businesses".

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