British Sky Broadcasting (BSkyB) in a surprise move, bought a 17.9 percent stake in ITV for $1.8 billion. It makes BSkyB the networks largest single shareholder. With its audience share and ad revenue declining, the company has been under scrutiny for the last year.
CEO James Murdoch said: "Our investment is a long-term and supportive shareholding in ITV, it reflects our belief that ITV's decline has been overstated. BSkyB would be supportive of the ITV board. We realize that ITV has been going through tough times, but with careful stewardship it can return to form."
This sends a disruption in the process that was going on with NTL and Richard Branson - which we recently talked about - and their intention to merge with ITV. RTL, a pan-European group, was also looking at buying the network.
The ITV network was selling at a low $2.20 a share, which Murdoch and BSKyB paying a $2.56 premium for their investment. Nobody on the board of ITV knew that the buying of the shares was going to take place.
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