Liberty Looks at Virgin Media Bid

U.S. cable pioneer John Malone's Liberty Global is considering joining the bidding party for UK cable giant Virgin Media, the Wall Street Journal and Financial Times reported. Malone told the FT Liberty was "doing our homework." Virgin put itself up for sale after receiving an an unsolicited offer valuing the company at $8B-$10B from Carlyle Group, and has set an August 8 deadline for expressions of interest. It already has received indications from more than 10 private equity firms and cable firms, although the Journal said people familiar with the matter believe the upheaval in debt markets could slow a private-equity deal. Liberty CEO Michael Fries told the Journal that the company would consider a joint venture with a private equity fund. He said Liberty was exploring Virgin even though it typically prefers markets with more growth potential than the UK. "We owe it to our shareholders to look at this type of company given its size, scale and unique financial attributes, including its tax position," he said, referring to accumulated losses that could be used to offset taxes. Malone said: "We have to look at it, not in a traditional way but in a quite exceptional way, perhaps with partners, perhaps in ways we'd not regard a normal cable company." He did, however, worry about the competitive prospects of facing British Sky Broadcasting. "The concentration of market power that's been created means you have to scratch your head and say 'can anything compete?'" Virgin couldn't be reached for comment.

Sources: Wall Street Journal, Financial Times
Commentary: Virgin Media : Good News All Around • Virgin Media and Sky: Report From The Battlefield • Virgin Media and Sky: Report From The Battlefield
Stocks/ETFs to watch: LBTYA, VMED, LCAPA

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