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Takeover talk adds to Virgin Media troubles
By DAVID BLACK
THE HERALD
May 22 2007
Full Story:http://www.theherald.co.uk/business/news/display.var.1414979.0.0.php
US-traded shares in Virgin Media rocketed more than 9% yesterday on speculation that the cable company could be a takeover target.
Shares in Virgin Media, which launched earlier this year from the merger of NTL, Telewest and Virgin's mobile phone division, rose to $27.10 in electronic trade from a close of $24.85 on the Nasdaq.
However, the stock fell back to $26.65, up just $1.80, at the end of the session in New York.
advertisementRumours centred around a private equity consortium headed by US-based Providence Equity Partners, which reports said was considering making a $15bn (£7.5bn) approach for Virgin Media.
Yesterday's rumours about Providence's intentions come less than a year after the American private equity group was first mooted to be in talks to buy Virgin Media - then known as NTL until its rebrand earlier this year.
It is thought that Providence is keen to revive takeover efforts to take advantage of Virgin Media's current troubles. The broadcaster is in a high-profile dispute with rival BSkyB.
The group reported a fall in customer numbers in its first quarter results and warned of more to come as a result of a long-running row with BSkyB over contract renewal terms for the basic Sky channels.
The dispute, about how much BSkyB should get for its channels being shown on the Virgin Media cable system, led to BSkyB taking its basic channels off the network in February.
That means Virgin Media, which carried hit programmes such as Lost and 24, is no longer screening them. The company declined to comment on the takeover speculation.
It is reported that Providence is talking to fellow private equity groups Kohlberg Kravis Roberts, Blackstone and Cinven about making an approach within weeks.
The bid rumour follows the latest instalment in the Virgin Media - BSkyB dispute late last week, which saw BSkyB issue a statement saying Virgin Media had rejected its most recent attempts to find a solution - a claim denied by the cable firm.
Relations between the two groups have soured since BSkyB scuppered Virgin Media's plans for a £5bn takeover of ITV last November by buying a 17.9% stake in the commercial broadcaster.
The controversial move by Sky could now be scrutinised by the Competition Commission after an Office of Fair Trading investigation found the holding threatened ITV's independence.
By DAVID BLACK
THE HERALD
May 22 2007
Full Story:http://www.theherald.co.uk/business/news/display.var.1414979.0.0.php
US-traded shares in Virgin Media rocketed more than 9% yesterday on speculation that the cable company could be a takeover target.
Shares in Virgin Media, which launched earlier this year from the merger of NTL, Telewest and Virgin's mobile phone division, rose to $27.10 in electronic trade from a close of $24.85 on the Nasdaq.
However, the stock fell back to $26.65, up just $1.80, at the end of the session in New York.
advertisementRumours centred around a private equity consortium headed by US-based Providence Equity Partners, which reports said was considering making a $15bn (£7.5bn) approach for Virgin Media.
Yesterday's rumours about Providence's intentions come less than a year after the American private equity group was first mooted to be in talks to buy Virgin Media - then known as NTL until its rebrand earlier this year.
It is thought that Providence is keen to revive takeover efforts to take advantage of Virgin Media's current troubles. The broadcaster is in a high-profile dispute with rival BSkyB.
The group reported a fall in customer numbers in its first quarter results and warned of more to come as a result of a long-running row with BSkyB over contract renewal terms for the basic Sky channels.
The dispute, about how much BSkyB should get for its channels being shown on the Virgin Media cable system, led to BSkyB taking its basic channels off the network in February.
That means Virgin Media, which carried hit programmes such as Lost and 24, is no longer screening them. The company declined to comment on the takeover speculation.
It is reported that Providence is talking to fellow private equity groups Kohlberg Kravis Roberts, Blackstone and Cinven about making an approach within weeks.
The bid rumour follows the latest instalment in the Virgin Media - BSkyB dispute late last week, which saw BSkyB issue a statement saying Virgin Media had rejected its most recent attempts to find a solution - a claim denied by the cable firm.
Relations between the two groups have soured since BSkyB scuppered Virgin Media's plans for a £5bn takeover of ITV last November by buying a 17.9% stake in the commercial broadcaster.
The controversial move by Sky could now be scrutinised by the Competition Commission after an Office of Fair Trading investigation found the holding threatened ITV's independence.
