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Virgin Media receives takeover approach

A privaty equity group has made a preliminary offer of $11.5 billion for the Virgin Media group.

Virgin Media, which was formed from the cable group NTL/Telewest and Virgin Mobile earlier this year, is rumoured to have received a number of informal approaches, one of whom is the Carlyle Group. 

Richard Branson’s Virgin Group owns 10 percent of the shares of Virgin Media, and is said to support a possible sale of the unit to a private equity group according to the Financial Times.

Since the rebranding however, Virgin Media has struggled, with revenues falling in the last set of financial results.  Virgin Media also withdrew Sky’s basic channels from the Virgin Media TV packages following disagreements over pricing and led to some customers defecting to Sky. 

It also lost its position as top broadband provider, which is now occupied by BT broadband.  However, its saving grace in the broadband stakes may be the fact that it has the potential to offer faster speeds than BT currently is able to offer.

Virgin Media has asked Goldman Sachs to act on its behalf and conduct an auction for the group.