First Round Bids For Virgin Media By Early August - Source

LONDON -(Dow Jones)- Virgin Media, the UK cable and MVNO operator, has begun an auction process and is asking potential bidders to submit expressions of interest by the first week in August, a person familiar with the matter told Dow Jones Newswires Monday.

The heavily indebted company, which is listed on the Nasdaq but operates solely in the U.K., said earlier this month it had received an approach for the company and would begin a strategic review that could lead to a sale.

Earlier, people familiar with the matter said Carlyle Group had made an offer for Virgin Media that would value its equity at around GBP4 billion to GBP5 billion. The offer was pitched at between $30 and $35 per share. Virgin Media has around GBP6 billion of debt.

Goldman Sachs Group and UBS are advising Virgin Media on the potential sale. Neither could immediately be reached for comment Monday.

The person said that Virgin had made presentations to a number of potential bidders, but didn't identify them.

According to press reports, Providence Equity Partners, Blackstone Group, Kohlberg Kravis Roberts & Co. and Apax Partners are among the interested private equity groups. Time Warner, and Comcast Corp., are also reportedly interested, according to U.K. press reports.

None of the bidders reportedly interested could immediately be reached for comment Monday.

Virgin Media, which formerly traded as NTL, was relaunched in February amid a blaze of publicity after a series of deals, which included the merger of two U.K. cable operators and a transaction in which U.K. entrepreneur Richard Branson took a 10.5% stake in the company and licensed the Virgin brand name, and sold his controlling stake in his mobile operator, Virgin Mobile.

The company sells cable television, high speed Internet, mobile and fixed line telephony services to customers.

Although it has made headway in drawing a line under NTL's poor reputation for customer service, it is losing broadband and television customers to its key U.K. rival British Sky Broadcasting Group, the pay television operator in which News Corp. has a 39.1% holding.

The two companies are currently mired in a court battle after they failed to agree terms on the price for packages of TV services to be carried on one another's channels, including programs such as The Simpsons and Lost. Virgin said that the dispute was one of the factors behind a drop of 46,900 subscribers from its cable television and broadband services in its first quarter.

Company Web site: http://www.virginmedia.com

-By Jessica Hodgson, Dow Jones Newswires; +44 207 842 92 93; jessica.hodgson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 23rd July 2007