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Sky 'incurs £348m loss on ITV stake sale'

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Sky 'incurs £348m loss on ITV stake sale'
Sky has suffered an estimated loss of £348 million after being forced into a cut-price sale of a portion of its controversial 17.9% shareholding in ITV.

Yesterday, it emerged that the satellite broadcaster had placed 404,362,095 ITV shares - representing a 10.4% stake - with Morgan Stanley Securities at 48.50p per share at an aggregate consideration of around £196m.

The move follows a decision by the court of appeal to reinforce a Competition Commission ruling that Sky must sell down its stake in ITV to just 7.5%.

After Sky opted against escalating its case to the supreme court, secretary of state for business, innovation and skills Peter Mandelson gave final undertakings for the stake sale.

Morgan Stanley subsequently sold the shares to various institutions for 49.5p, considerably below the 135p a share Sky paid in 2006 to secure 696m ITV shares.

At the time of the purchase, there were suggestions that the move was designed to block ITV from joining up with Sir Richard Branson's Virgin Group, containing cable operator NTL, now Virgin Media.

However, Sky anticipated the huge decline in ITV's share price over the past 18 months by writing down the stake to just 20p a share.

In a statement, Sky said that it intends to retain the residual 7.5% stake in ITV for the medium term, in which time it will "remain a committed shareholder of ITV".

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