As reported on the 22nd May in the TTBB news story “Virgin Media about to be bought for £7.5 billion?” Virgin Media looks likely to be bought by a private equity firm.
However there have been developments since the end of May, as now the only firm to have made an offer is Carlisle, one of the world’s leading private equity groups. Carlisle have made a preliminary offer of between $33 (£16.50) and $35 per share for Virgin Media, whereas the shares listed on the NASDAQ closed Friday valued at $24.37 per share. On the other hand the Virgin board believes the business could be worth around $40 a share.
The total value of the takeover deal would be around £11.5bn which takes into account Virgin Media's debts of £6m. As reported in May, Providence have also declared interest in Virgin Media, and many more firms are interested may be interested. Virgin believe that the company will be more successful privately owned due to being freed of making onerous requirements of releasing quarterly figures etc.
Virgin’s investment bankers Goldman Sachs have carried out detailed research into the company’s worth, to speed up the process. Aspects include the legal dispute between Virgin Media and Sky which resulted in Virgin Media removing the basic Sky packages from their service.
In its last results, Virgin stated that it had 3 million users subscribing to their television service, 3.4 million broadband customers, 4.5 million mobile phone users and 4.1 million fixed-line customers.
It is believed it will take 6 weeks for Goldman Sachs to whittle the list of potential suitors to a definitive shortlist.
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