Is BSkyB being too clever?

The late Friday bid by BSkyB to thwart a takeover plans by NTL/Virgin or RTL of ITV are drawing claim and counter claim this morning in London. Sir Richard Branson leading the charge that the takeover contravenes various stock market and media monopolies rules.

The markets have reacted by thrashing both BSkyB and ITV today.

The FT in London reports "Shares in ITV, the UK commercial broadcaster, eased in mid-morning trading following the announcement last Friday evening by British Sky Broadcasting that it had bought a 17.9 per cent stake for £940m.

ITV shares fell almost 2 per cent to 113 3⁄4p. BSkyB, the satellite television group chaired by Rupert Murdoch, paid as much as 135p a share, 17 per cent more than last week’s closing price of 115p. BSkyB shares dropped 81⁄2 p to 5281⁄2 p. "

Shareholders are concerned that a billion pound revolving door credit set up two years ago was to have been used to finance BSkyB’s costly investment in Broadband Internet, but has been diverted to buy shares in ITV. In order to rebuff any accusations of market manipulation, BSkyB cannot suddenly just sell the stocks in the short term.

Clearly, the saga will play out in front of us like one of the soap opera’s both companies continually thrust upon us.