Monster equity group Carlyle makes a formal offer.
Now this would be a turn up for the books…
In an announcement which makes great headlines but – in truth – probably little change to the consumer Virgin Media has confirmed it is in talks about selling up to a private equity group.
Carlyle, one of the world’s largest equity groups with more than $58.5bn of capital under management, has made a preliminary offer of between $33 and $35 per share for Virgin Media according to the BBC. This would value the media giant at £5.6bn and also assume the group’s debt of almost £6bn – a near £12bn total investment.
“The proposal is based on public information and is subject to various conditions, including a due diligence examination and a period of exclusivity,” said the NTL, Telewest and Virgin Mobile conglomerate which only launched in February. It added that a strategic review of the company by Goldman Sachs had been requested internally prior to the bid and “The proposal will be considered as part of the review (though) there is no assurance that any transaction will occur or, if so, at what price.”
The Beeb claims that while the finalisation or even acceptance of such an offer is a long way off, secretly Virgin directors believe the switch to private ownership would greatly accelerate the company’s potential growth. It also goes on to speculate that additional equity groups would likely rival Carlyle while suggesting sources close to Sir Richard Branson believe he would like to remain part of the business even if it was sold.
With Virgin Media less than five months old and a bitter legal fight with BSkyB still ongoing the conglomerate has certainly had an eventful birth. With reports that customer numbers are growing and its broadband cable service rapidly expanding to 20Mbit capacities nationwide I’d suggest Carlyle better move fast if it doesn’t want to pay a lot more 12 months down the line…