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Virgin Media news

A private equity consortium spearheaded by US group Providence Equity Partners, is considering a $15 billion (£7.5 billion) for Virgin Media.

Virgin Media formally known as NTL/ Telewest have been struggling since a relaunch earlier this year, after having reported a loss of approximately 55,000 customers this year. The company also recently lost its top spot as the largest broadband provider in the UK to BT.

A long bitter dispute with BSkyB has also harmed Virgin Media’s sign-up-ability as TV watchers cannot get some key Sky channels as the dispute over TV rights pricing has led to Virgin Media pulling some of Sky’s basic channels from its service.

The development has led to some customers leaving Virgin Media and switching to Sky in order to continue watching these channels, particularly as Sky now offer broadband free as part of many packages.

Providence Equity launched a bid last summer for the cable company at $31 a share, however the consortium is now expected to take advantage of the relatively weak share priced at around $24 with a new opportunistic bid. If a deal did take place it could net tycoon Richard Branson £400 million in shares although it is believed he will retain a substantial holding.

It is unknown whether Branson will favour a bid, but it is speculated that some members of the board maybe willing to sell.

Providence Equity Partners are in talks with its partners, Blackstone, KKR and Cinven, over the possibility of making an approach in the coming weeks.

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