British pay-TV group BSkyB was ordered to sell down its 17.9 per cent stake in rival free-to-air broadcaster ITV today, in the latest setback in its long-running and expensive legal dispute.
BSkyB had gone to the Court of Appeal to challenge an earlier ruling which ordered the company to reduce the stake to below 7.5 per cent to prevent a loss of competition in the media sector.
Previous appeals had also been dismissed as being without substance.
The Court of Appeal on Thursday refused BSkyB permission to appeal further to Britain's Supreme Court, although it said it was open to BSkyB to apply directly to the Supreme Court for permission to appeal.
BSkyB was ordered to pay costs to the Competition Commission and the Secretary of State.
The company said in a statement it noted the result and would review the judgement and consider its next steps.
BSkyB, which had James Murdoch as its chief executive at the time, bought the ITV stake for £940 million or 135 pence per share in 2006, effectively blocking cable group NTL, now renamed Virgin Media, from buying ITV.
The move caused uproar at the time and prompted a public slanging match between the Murdochs and Virgin Media's largest shareholder, the British entrepreneur Richard Branson who accused the Murdoch media empire of being "a threat to democracy".
BSkyB has claimed it bought the stake as an investment although it has since been forced to write the value down. ITV has also called for BSkyB to sell.
The dominant pay-TV group has since launched numerous legal appeals and analysts believe it is now running out of options.
BSkyB had wanted the case sent back to the Competition Commission for a fresh investigation, which, if successful, would have delayed the date by which BSkyB would have to sell the stake.
It had appealed to the Court of Appeal in October, saying it disputed the scope and depth of the review, the standard of proof that the stake would reduce competition and the suggested remedies.
However the Court in central London largely found in the favour of the previous rulings.
The timeframe given to BSkyB has been kept confidential but analysts expect the group to be given around 6 months to sell the stake.
Traders immediately seized on the announcement as a sign that RTL Group could buy the stake and make a full bid for ITV but RTL has consistently declined to comment on the rumour.
Reuters