Virgin Media Confirms Takeover Approach

UK telco, broadband and digital TV provider Virgin Media confirmed it has received a 100 percent takeover bid, following earlier reports private equity house Carlyle was circling with an offer of between $33 and $35. Virgin said it asked Goldman Sachs to review the business for options including a possible sale. (Statement). Virgin Media was born just five months ago out of the merger of ntl/Telewest and Virgin Mobile, pledging to improve previously poor customer service and lead the charge toward converged media with its quad-play offer. It has made headway on both counts and is popularizing non-linear channels – but lost some 46,900 TV subscribers in the last quarter after failing to secure a carriage deal for BSkyB’s basic channels, prompting fans of Lost and 24 to look to rival platforms, and has around £6 ($12.1) billion in debt.

AP: Ovum analyst Mike Cansfield said taking the company private would allow it to press on with its multi-media business without those subscriber numbers circulating in the public (so preventing BSkyB from scoring points of Virgin’s losses). Virgin did not name its suitor in its statement.

Update: WSJ: “Carlyle is acting alone, but has held talks with private-equity firms including Apax Partners, according to a person familiar with the matter.”
— “Virgin Media said the proposal would be subject to various conditions including due diligence and a period of exclusivity.”