Battle for Virgin Media gears up as Providence and KKR indicate interest

July 19, 2007 – UK broadband and television group Virgin Media has reportedly received interest from new parties, following a recent offer by private equity group Carlyle.

US buyout firm Providence has reportedly instructed advisors to draw up an offer for Virgin Media, and is thought to have joined forces with US private equity firm KKR, the new owner of Boots, as well as Blackstone and Cinven.  Other private equity groups are also understood to be debating joining the running.

While Carlyle’s offer was confirmed by Virgin Media last week at $33 to $34-a-share, which values Virgin at $23bn including £6bn of debts, rivals have insisted that their offers will not better this – due in part to volatility in the debt markets.

Interested companies are reported to be invited for presentations with Virgin Media’s management, with a deadline for first-round offers set for a date in August.  Providence approached Virgin Media last year with an offer of about $30-a-share.

While Carlyle is thought to be operating alone for Virgin, it is also said to be open to leading a consortium.  Virgin’s advisors are expected to lay down rigid nondisclosure agreements for participants to prevent groups of private equity operators joining forces at a later stage.