Virgin media confirms takeover bid

Cable company Virgin Media today confirmed it had received a takeover offer for the business.

The company did not reveal the identity of the bidder although speculation has centred on private equity firm Carlyle.

The private equity firm is understood to have tabled an offer of more than £5.5bn (€8.1bn) for the business although Virgin Media said today that the offer would be withdrawn if its terms were made public.

The company has been reviewing options for the business - including a potential sale - with investment bank Goldman Sachs.

Virgin said today’s offer, also subject to due diligence and an exclusivity period, would be considered as part of the review.

Virgin founder Richard Branson is reportedly keen for a sale of the New York-listed company, which was formed last year by a merger between Virgin Mobile and NTL Telewest.

Sir Richard’s Virgin Group is the largest shareholder in the business, with a 10.5% stake.

Carlyle has substantial experience in the cable market and owns Insight Communications, which is among the 10 largest cable firms in the US.

If Carlyle is the bidder, the offer is also likely to spark a private equity bidding war for Virgin Media with reported interest from rivals including Providence Equity, which also owns a number of US and European TV companies.

Last year a consortium made up of Providence Equity, Blackstone Group, Kohlberg Kravis Roberts and Cinven made a failed approach for NTL.

Virgin Media’s shares have come under pressure after a row over prices with rival BSkyB led to Sky’s basic channels – and hit shows such as 24 – being withdrawn from the Virgin service at the end of February.

The dispute cost Virgin Media 46,900 customers in the first three months of the year.

The company has started High Court proceedings against BSkyB to resolve the dispute and will seek compensation for any financial losses caused as a result of the row.

BSkyB is expected to file its response to Virgin Media’s lawsuit this week.