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Virgin Media

Virgin Media confirms takeover talks with Liberty Gold

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By Stephen Lepitak, -

February 5, 2013 | 3 min read

Virgin Media has confirmed reports that it is in talks with Liberty Global which could lead to a takeover by the US television and broadband service.

Virgin today released a statement confirming that talks concerning ‘a possible transaction’ were taking place.

The confirmation follows a report run by the Financial Times last night claiming that a bid for Virgin Media was being prepared.

Adrian Drury, principal analyst at Ovum, described the potential deal as being driven by the 'competitive need' to flight News Corporation.

"in the near term it will make the UK the ring for a straight slug fest between two global pay-TV heavyweights, John Malone and Rupert Murdoch, as they battle for UK fixed broadband, fixed voice and pay-TV subscribers," he continued. "Depending on how Malone might chose to leverage the Virgin Mobile asset, it may also spill over in consumer mobile services.

“Malone will bring the operational smarts from cable operations in 13 markets, multi-territory leverage with the major studios and sports federations, plus its recently launched Horizon next generation pay-TV and multi-screen platform, now rolling out across its European operations. But it will be facing off against a jewel in the Murdoch empire. BSkyB, by any measurement is one of the best-run pay-TV operations on the planet, with a strong technology platform strategy, some powerful content rights, including exclusive rights to the entire HBO catalogue, control of the Premiership coverage wholesale market, and exclusivity on the output of all of the majors in the First Subscription Pay-TV Window. Plus also note that the UK is a must win market for two major disruptive SVOD players, Amazon’s Lovefilm and Netflix. If Malone closes the deal, this will be a very interesting competition to watch and real test for the Liberty vision of the future of cable TV and internet services. Also expect that there would be some collateral damage, potentially other UK telcos trying to solve their triple play pay-TV challenge , such as Talk Talk and BT.”

Talks are expected to take place this week over the deal.

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