Carlyle Group Considers Acquisition Of Virgin Media: Reports

The Carlyle Group is in talks to acquire UK cable company Virgin Media, according first to the Times of London, followed by the Sunday Telegraph, the New York Times, Reuters, etc.. It’s not the first time American private equity has evinced an interest in underperforming Virgin Media; talks with a consortium, including Providence Equity Partners, didn’t go very far last year. This version could meet the same result. Also, Providence could be back in the hunt. So far, no official comments. VMED closed at $24.37 on the NASDAQ Friday; its 52-week high was $28.55.

Times: The paper reports that Sir Richard Branson, whose Virgin Group owns 10.5 percent of Virgin Media, is open to a buyout and would consider rolling at least part of that into a new deal. The latest negotiations “are believed to center on a price above the $30 per share that was informally pitched to Virgin Media by a consortium of private equity players last year. A $30-a-share bid equates to an equity value of about $10 billion.”

NYT: The two are in discussions over a potential bid worth around $20 billion (including debt), according to “a person familiar with the negotiations.” The same person warned that talks are still early and may not lead to a bid.

Reuters: Virgin Media “has appointed Goldman Sachs to seek a possible buyer after it received approaches from various private equity firms, people familiar with the situation said on Sunday. … Virgin’s market capitalization is $8 billion, meaning any offer would likely exceed $10 billion based on the typical premiums paid in takeovers. The company, whose shares are traded in New York but whose operations and customers are in Britain, also has another 6.1 billion pounds ($12.21 billion) of long-term debt.”

FT: “Any bidder would have to buy out or work in partnership with Virgin Group, which has a 30-year exclusive branding agreement, with a 10-year opt-out clause, for use of the Virgin name.”

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