Shares in ITV, Britain's largest commercial broadcaster, fell sharply this morning amid speculation about the company's future in the wake of BSkyB's surprise acquisition of a stake in the firm.
The value of ITV stock plunged by as much as seven per cent during early trading this morning after the satellite broadcaster BSkyB announced late on Friday that it had bought up a 17.9 per cent share of the firm for £940 million.
Analysts claim that the shock move is likely to scupper a possible takeover bid for ITV from rival cable TV operator NTL, which announced earlier this month that it was in talks with the broadcaster over a possible merger between the two companies.
Shares in ITV, which has struggled over recent months in the face of declining advertising revenues, had previously been boosted by the news of a possible NTL deal.
But amid growing uncertainty about the company's future in the wake of BSkyB's surprise acquisition, the value of ITV stock has been hit.
Further anticipation about the potential impact of the move has arisen following a request from NTL's largest shareholder, entrepreneur Sir Richard Branson, for regulators to intervene and force BSkyB to sell its newly acquired stake.
Sir Richard, who received an 11 per cent stake in NTL after selling his Virgin Mobile business to the company earlier this year, is expected to contact the Office of Fair Trading (OFT) after claiming that BSkyB's move represented "a blatant attempt to distort competition" within the broadcasting sector, "blocking any attempt to create a strong and meaningful competitor" to its own operations.
But in a statement today, ITV insisted that BSkyB had assured the broadcaster that it had no intention of either purchasing a further stake in the company, or launching an offer for it.
ITV stressed that under current broadcasting laws, BSkyB was prevented from holding a stake of more than 20 per cent in the company.
"British Sky Broadcasting has further confirmed their wish to be a supportive shareholder, working constructively with ITV, and exploring options to create value for all shareholders," ITV said in a statement.
"The board of ITV looks forward to such discussions with British Sky Broadcasting in due course," the statement added.