Pay TV company BSkyB paid around £940 million to acquire a 17.9 per cent stake in broadcaster ITV, but said it would not make a full bid for the company.
The surprise announcement came after the London Stock Market closed today and followed a statement last week from British cable operator NTL that it had approached ITV about combining the two companies.
ITV has also been linked in the media with RTL Group, Europe's biggest commercial broadcaster, in a deal with private equity firms.
"We don't see that mooted tie-up in the press and by the companies as a threat," BSkyB Chief Executive James Murdoch told a conference call.
"We think ITV is really a unique asset in the UK and in Europe and we think that now is a good time to invest."
BSkyB said it had acquired 696 million ITV shares at 135 pence each - a 16.6 percent premium to ITV's closing share price of 115 pence, up 0.9 per cent.
At 135p a share, ITV is valued around 5.16 billion pounds. ITV noted that BSkyB cannot hold over 20 per cent under UK broadcasting rules and that BSkyB wished to work constructively with ITV to explore options to create shareholder value.
"The board of ITV looks forward to such discussions with BSkyB in due course," ITV said in a statement. Some analysts say they thought the move was a "blocking stake."