Blog Post

Virgin Media Update: Carlyle ‘Could Drop Branson Name’

Investment group Carlyle is considering changing Virgin Media’s name if it succeeds in its buyout bid, according to The Observer. Coming just five months after the outfit spent £25 ($50) million on a wide-ranging rebranding deal under the new name adopted following the merger of ntl/Telewest and Virgin Mobile, this would come as a shock. Largely thanks to Branson, the Virgin brand enjoys plenty of goodwill amongst admiring customers. Richard Branson’s Virgin empire is the largest Virgin Media shareholder on 10.5 percent and has licensed the “Virgin” brands to the company for 30 years in a package that also includes various appearances by the entrepreneur.

But Carlyle execs, say “City sources” in The Observer, reckon jettisoning the association with the entrepreneur could help restore the relationship with James Murdoch’s BSkyB. That soured after the pair failed to renegotiate terms for carrying basic BSkyB channels on the Virgin cable platform, prompting Branson to complain the company behaved anti-competitively when it scuppered Virgin’s bid for ITV last fall by taking a 17.9 percent stake in the broadcaster. Those complaints, which came because BSkyB has stolen TV market share from Virgin, moved regulators to launch inquiries that will now hold up BSkyB’s plans to launch a pay-TV Freeview service until next spring. Virgin this month confirmed it has received a takeover offer but declined to confirm reports Carlyle was the suitor.

FT: “Carlyle remains the main party interested so far, while members of a previous consortium comprising Providence, Blackstone, KKR and Cinven are understood to be talking about whether to reform.”

Mail On Sunday says Virgin Media has approached “two U.S. media giants” to begin an auction of the company.