Video and broadband service provider Liberty Global Inc. (LBTYA: Quote, LBTYB, LBTYK) is preparing to make a bid for UK cable operator Virgin Media, Inc. (VMED: Quote,VMED.L), which has an enterprise value of more than $20 billion, the Financial Times reported, citing people familiar with the situation.
The deal has not been finalised and could still fall apart. As per the report, the companies could announce the deal in the coming days.
As of Monday, Virgin Media has a market capitalisation of $10.4 billion, and its net debt was 5.7 billion pounds at the end of the last quarter.
In its third quarter, Virgin Media, a provider of broadband internet, TV and telephone services in the UK, reported a turnaround to profit as revenues grew 2.8 percent benefited by addition of more customers. The company said it experienced strong demand for its superfast broadband and TiVo.
It is expected that the acquisition of Virgin Media, if successful, could give Colorado-based Liberty Global savings across its network in countries such as the Netherlands, Germany, Switzerland and Chile.
The latest move comes more than five years after US billionaire John Malone's Liberty Global first considered buying the UK firm, which also offers telecoms services. Sir Richard Branson's Virgin Group has a 3 percent stake in Virgin Media.
On Monday, Virgin Media shares closed at $38.69 on the Nasdaq, down 2.37 percent, and settled in London at 2,463 pence, down 0.53 percent.
Liberty Global closed at $69.46, down $1.02 or 1.45 percent.
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by RTT Staff Writer
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