Virgin Media: To Extend Strategic Review Process
LONDON -(Dow Jones)- Virgin Media, Tuesday said it planned to extend the timetable of a strategic review which could lead to a sale.
The U.K. cable and MVNO operator, which is listed on the New York Nasdaq exchange although it operates solely in the U.K., said in July it had received an indicative offer for the company from an undisclosed party. People familiar with the matter later confirmed to Dow Jones Newswires that the company was private equity firm Carlyle Group.
Virgin Media is burdened with around GBP6 billion of debt, and the approach valued its equity at between GBP4 billion and GBP5 billion, people familiar with the matter said.
An initial first round bid deadline was set for this week, people familiar with the matter said. But volatility in the credit markets has prompted concern that some private equity bidders may not be able to raise debt financing.
"Potential strategic and financial counterparties have continued to confirm a strong ongoing interest in a transaction," Virgin Media said in a press statement Tuesday.
"To enhance shareholder value, Virgin Media's financial advisers have recommended that Virgin Media extend the process until these parties can complete their proposals in a more stable debt market environment."
Several private equity firms are monitoring the situation, according to people familiar with the matter. These include London-based Cinven Group, Apax Partners, Providence Equity Partners and TPG.
Other firms reported to have approached the company include Kohlberg, Kravis Roberts and Blackstone Group. USA cable operator Liberty Global is also interested, Chairman John Malone said in a recent newspaper interview.
Virgin Media was formed through a series of transactions between 2005 and 2006 that involved the merger of the UK's only two significant cable operators, Telewest Global and NTL. In a separate transaction, entrepreneur Richard Branson took a 10.5% equity stake in the wider company and sold his controlling stake in Virgin Mobile, a mobile operator.
The company relaunched itself as Virgin Media earlier this year in a bid to compete against incumbent pay television and telecom operators in the UK.
Although it has made headway in drawing a line under the poor reputation of its predecessor company NTL, Virgin Media is losing broadband and television customers to its key rival, British Sky Broadcasting Group, in which News Corp. is a 39.1% stockholder.
The two companies are also embroiled in a legal dispute following their failure to agree terms for the prices they charge one another to carry content on each other's channels.
-By Jessica Hodgson, Dow Jones Newswires; +44 207 842 92 93; jessica.hodgson@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 7th August 2007
