BSkyB could be forced into taking a hit amounting to £255 million — about 40 per cent of this year’s predicted profits — if John Hutton forces it to sell a 10 per cent stake in ITV at current prices.

The Cabinet Minister is expected to rule this morning on whether he will follow the advice of the Competition Commission and order Sky to cut its 17.9 per cent holding to 7.5 per cent to avoid what the regulator says is the risk of undue influence.

A sale would force Sky, 39.1 per cent owned by News Corporation, parent company of The Times, to crystallise a loss of about £255 million because ITV’s share price has collapsed from the 135p the stake was bought at to 72p last night.

Deutsche Bank estimates that Sky’s pre-tax profits in the year to June 30 2008 will amount to £651 million, following turnover of £4.9 billion. Customer numbers are expected to lift by 170,000 to 8.8 million.

Sky may also take an impairment charge against the stake when its second-quarter results are released early next month, unless moves to dispose of the holding before then trigger an immediate loss. The charge would reflect the weakness in ITV’s share price and a belief that Sky cannot recoup the £940 million paid for the shares and is not necessarily directly linked to Mr Hutton’s verdict. Volatility in ITV’s share price means that the exact level of any impairment is hard to predict. It would amount to £340 million if it was applied to the entire holding, being the difference between the purchase price and ITV’s share price on December 31 — the date at which Sky’s balance sheet is next finalised.

However, further falls in ITV’s share price since means that today the shares are worth 53 per cent of the price paid for them when they were acquired in November 2006 at a time when ITV was contending with a takeover bid from Virgin Media. That represents a loss of £448 million on the entire stake.

Mr Hutton is likely to give Sky some time to sell the holding. The deadline may not be made public because of its market sensitivity. Sky will also have four weeks to appeal against the verdict. Mr Hutton’s verdict will be released at 7am. Mr Hutton is unable to vary the Competition Commission’s finding that Sky’s stake in ITV is uncompetitive but he can vary the proposed remedy.

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