Greg Dyke: A bold move from the man who is always one step ahead
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Your support makes all the difference.This is a fascinating development because it tells you how worried BSkyB were about ITV and NTL getting together. Rupert Murdoch has paid £1.35 a share, which is way above what NTL would have paid. So Murdoch is using his muscle to stop two of his competitors merging.
You have to admire his nerve because he has just bet a billion pounds on buying nearly 20 per cent of ITV at a price way above anybody else's valuation. And he can't own the whole company because the law prevents him owning more than 20 per cent. The irony is that earlier this week his son, James Murdoch, the chief executive of BSkyB, went public saying that these two companies coming together did not bring the other what it needed. Either he was bluffing or his dad didn't agree. Probably the former.
The interesting thing is the identity of the seller, ITV's biggest shareholder Fidelity, who have beenn deeply frustrated with the board of ITV, including the way it behaved towards the Apax/Goldman Sachs takeover bid which I was involved with. They are equally frustrated that they've not been able to influence who should be the next chairman and chief executive of ITV. .
In many ways this is ITV's worst nightmare because nobody can now buy that company without Murdoch's permission. He has effectively got a blocking minority on a future takeover.
The law on this is perfectly clear. BSkyB cannot own ITV but there's nothing to stop them owning this shareholding.
Over the past decade, BSkyB has made life very difficult for the cable companies. Just maybe - although I personally don't think so - a merger with ITV may have offered them a way out of BSkyB's dominance. But then, bang, BSkyB puts a stop to it.
It will be seen as an incredibly bold but defensive move by Murdoch. The last thing he could have afforded was a situation where NTL said: "If you want to watch Coronation Street you have to go on cable." I presume that would be his great fear, even though I believe it's very doubtful it would ever have happened.
Why pay a premium for a company you can't own? He's using his power in the marketplace to stop a potential rival growing.
Greg Dyke is a former Director General of the BBC
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