Providence Equity Mulls $15 Billion Bid for Virgin Media -- The Observer

A private equity consortium led by Providence Equity Partners is weighing a $15 billion bid (£7.5 billion) for Virgin Media, according to The Observer. The other parties to the consortium are Blackstone, KKR and Cinven. Richard Branson is the largest shareholder in Virgin Media, which is the product of a recent merger between NTL, Telewest and Virgin's cellphone unit. Last summer, the Providence consortium attempted to buy Virgin Media for $31 per share, but was thwarted by opposition from investor Bill Huff, who has since reduced his holding. The share price has fallen to $24 on a drop in customers in Q1 2007 and concerns over a content dispute with cable company BSkyB. Last year, BSkyB prevented Virgin Media from taking over ITV by buying a blocking stake. The two companies are now squabbling over how much BSkyB should receive for its channels being broadcast on Virgin's cable network. If the takeover occurs, Branson could net $400 million.

Sources: The Observer, Reuters, Forbes
Commentary: Virgin Media Poised to Monetize Infrastructure Investment - Barron's • Virgin Media: The Lady Doth Protest Too Much • Virgin Media: This Cherry is Not Worth Plucking
Stocks/ETFs to watch: Virgin Media Inc. (VMED). Competitors: British Sky Broadcasting Group plc (BSY), BT Group plc (BT). ETFs: PowerShares Dynamic Media Portfolio ETF (PBS), PowerShares Dynamic Leisure & Entertainment (PEJ)

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