LONDON -(Dow Jones)- British Sky Broadcasting Group PLC (BSY) Thursday launched its appeal against a U.K. government tribunal order that it must cut its 17.9% stake in television broadcaster ITV PLC (ITV.LN).
BSkyB's appeal in a London court contends that the U.K.'s Competition Appeal Tribunal, which last year ruled that the company must reduce its stake in ITV to under 7.5%, erred in relation to issues including the intensity of review, standard of proof and remedies, a company spokesman said.
BSkyB lodged an application with CAT in February, 2008 against an earlier ruling by the Competition Commission. CAT has the power to quash part or all of the findings and to refer the case back to the Competition Commission for further consideration.
BSkyB argued that the Competition Commission, which ruled that BSkyB's stake in ITV was anticompetitive, made "mistakes at key steps leading to the divestment decision."
It also challenged the assertion that a merger has taken place between BSkyB and ITV, as well as the finding that BSkyB's investment prevents ITV from pursuing an "independent competitive strategy."
BSkyB's purchase of the ITV stake in November, 2006 prompted complaints from key rivals and lawmakers.
At the time, analysts believed the purchase was aimed at blocking a potential merger between ITV and cable operator NTL Inc., now called Virgin Media Inc. (VMED). The talks were called off after BSkyB bought the stake.
A spokeswoman from ITV, the U.K.'s largest terrestrial commercial broadcaster by sales, declined to comment further on the issue Thursday.
News Corp. (NWS), owner of this newswire, has a roughly 39% stake in BSkyB.
-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com