Private Equity Firm Bids For Virgin Media

The US private equity firm Carlyle is understood to have tabled an £11.5 billion bid for Virgin Media.

According to reports in today’s New York Times and Washington Post, Carlyle has made a preliminary offer of around £16.50 a share for the company.

This means that Virgin’s equity would be valued at £6.5 billion, which coupled with Virgin’s £6 billion debt would take the deal to around £11.5 billion.

Carlyle will have to negotiate with Sir Richard Branson, Virgin Media’s largest shareholder with a 10.5% stake, if the bid is to be successful.

Goldman Sachs has been asked to review ownership options, with Virgin Group believed to be keen on a sale.

However, other private equity firms are understood to be hovering around Virgin Media and it appears that an auction for the cable company could be a likely outcome.

Virgin Media is currently embroiled in a dispute with Sky over the carriage of the satellite broadcaster’s basic channels (see Virgin/Sky Channel Dispute Continues).

Having seemingly lost the Sky channels – including Sky One – for good, last month Virgin Media announced the launch of a branded TV channel on Freeview in autumn.

Virgin 1 will mix newly commissioned and acquired programming with user-generated content and hit shows from VMtv’s pay-TV channels (see Virgin Media TV To Launch New Channel).

Virgin Media: www.virginmedia.com