Virgin Media: To Extend Strategic Review Process

LONDON -(Dow Jones)- Virgin Media Inc. (VMED) Tuesday said it planned toextend the timetable of a strategic review which could lead to a sale.

The U.K. cable operator, which is listed on the New York Nasdaq exchangealthough it operates solely in the U.K., said in July it had received anindicative offer for the company from an undisclosed party. People familiar withthe matter later confirmed to Dow Jones Newswires that the company was privateequity firm Carlyle Group.

Virgin Media is burdened with around GBP6 billion of debt, and the approachvalued its equity at between GBP4 billion and GBP5 billion, people familiar withthe matter said.

An initial first round bid deadline was set for this week, people familiarwith the matter said. But volatility in the credit markets has prompted concernthat some private equity bidders may not be able to raise debt financing.

"Potential strategic and financial counterparties have continued to confirm astrong ongoing interest in a transaction," Virgin Media said in a pressstatement Tuesday.

"To enhance shareholder value, Virgin Media's financial advisers haverecommended that Virgin Media extend the process until these parties cancomplete their proposals in a more stable debt market environment."

Several private equity firms are monitoring the situation, according to peoplefamiliar with the matter. These include London-based Cinven Group, ApaxPartners, Providence Equity Partners and TPG.

Other firms reported to have approached the company include Kohlberg, KravisRoberts & Co. and Blackstone Group (BX). U.S. cable operator Liberty Media (LBTYA), is also interested, Chairman John Malone said in a recent newspaperinterview.

Virgin Media was formed through a series of transactions between 2005 and 2006that involved the merger of the U.K.'s only two significant cable operators,Telewest Global and NTL Inc. In a separate transaction, entrepreneur RichardBranson took a 10.5% equity stake in the wider company and sold his controllingstake in Virgin Mobile, a mobile operator.

The company relaunched itself as Virgin Media earlier this year in a bid tocompete against incumbent pay television and telecom operators in the U.K.

Although it has made headway in drawing a line under the poor reputation ofits predecessor company NTL Inc., Virgin Media is losing broadband andtelevision customers to its key rival, British Sky Broadcasting Group PLC (BSY),in which News Corp. (NWS) is a 39.1% stockholder.

The two companies are also embroiled in a legal dispute following theirfailure to agree terms for the prices they charge one another to carry contenton each other's channels.

Company Web site: http://www.virginmedia.com

-By Jessica Hodgson, Dow Jones Newswires; +44 207 842 92 93; jessica.hodgson@dowjones.com

Liberty Global Inc. (LBTYA), the U.S.-based international cable operator, isalso interested, Chairman John Malone said in a recent newspaper interview.

("Virgin Media To Extend Strategic Review Process-3-," published at 0750 GMT,misstated that Liberty Media had said it was interested in Virgin Media.)

(END) Dow Jones Newswires 08-07-07 0334ET Copyright (c) 2007 Dow Jones & Company, Inc.