Virgin Media shareholder Sir Richard Branson may form part of an £11 billion ($22 billion, €16 billion) take-private bid for the cable company, according to a company spokesperson.
The Carlyle Group, TPG as well as a consortium of Providence Equity Partners, Kohlberg Kravis Roberts, Cinven, and The Blackstone Group are all mulling bids according to the spokesperson.
Sir Richard Branson’s 10.1 percent stake could be rolled over to around 25 to 30 percent in any take-private bid in order to reduce the amount paid by any bidder, according to the UK newspaper Financial Times. Franklin Mutual Advisers, owned by Franklin Templeton, may also consider keeping its 9.3 percent stake, according to the FT. Franklin Mutual Advisers originally sparked interest in Virgin Media in May by criticising the company’s strategic direction, corporate governance and management.
The bidding price is expected to be around $32.00 per share. As well as paying an equity price of around £5 million the bidder would need to take on Virgin Media’s £6 billion of debt. As a result the deal is expected to have an enterprise value of about £11 billion.
Other bidders reportedly interested in the company also include Viacom, Comcast, Time Warner and Apax Partners although none of these could be confirmed by Virgin Media.
The buyout firm consortium including Providence and KKR had attempted to take Virgin Media private for £10 billion in 2006 but were blocked by hedge fund tycoon Bill Huff, then a major shareholder in the business. Huff has since decreased his stake and is no longer considered an obstacle to a potential takeover.
However, media reports suggest that some of the bidding groups have asked Virgin Media to delay the auction due to problems in the credit markets.