LONDON – British telecommunications company Virgin Media Inc. confirmed Monday it received a buyout offer, following reports that private-equity firm the Carlyle Group had bid $11.1 billion.
Virgin Media did not disclose the price of the offer, and said that the proposal stipulates that it would be withdrawn if the terms were disclosed.
An earlier report by Dow Jones Newswires, quoting people familiar with the matter, said Washington-based Carlyle offered between $33 and $35 per share for Virgin Media, or about 5.5 billion pounds. The company also has roughly 6 billion pounds ($12.1 billion of debt.
Carlyle did not immediately return a call seeking comment.
Virgin said in a statement that “there is no assurance that any transaction will occur or, if so, at what price.” The company added that it does not plan to comment further until a deal is reached or the offer is dropped.
Shares of Virgin Media jumped nearly 18 percent, or $4.35, to $28.72 in New York trading.
Virgin, the byproduct of a number of mergers, including the former cable operators NTL Inc. and Telewest and the mobile operator Virgin Mobile, reported its seventh consecutive quarterly loss in May after subscribers defected to rival satellite service BSkyB.
The company was formed to create Britain’s first “quadruple play” service, offering mobile phone, fixed-line phone, Internet broadband and TV services. It has struggled, however, to provide solid services across all four platforms and recently invested substantially in revamping its customer service after scores of complaints.
Virgin Media stopped airing basic BSkyB channels, dropping popular programs such as “Lost,” “24,” and “The Simpsons,” as the result of a battle over fees during negotiations to renew a distribution agreement.
BSkyB has long dominated pay TV in Britain, accounting for around 70 percent of the country’s pay-TV subscribers. But the arrival of Virgin Media has threatened a shake-up of the status quo, and relations between the two have become increasingly rancorous.
UBS said that a private equity approach for Virgin Media could result in a reduction of competitive pressure on BSkyB, which has a “triple play” service, offering high-speed Internet access, pay TV and landline telephone service.
“It could also result in a more pragmatic approach, with Sky and Virgin finally reaching an agreement on Sky basics which could be in the interests of both groups and Virgin Media customers,” analysts said in a research note.
Ovum analyst Mike Cansfield said that taking the company private “would enable it to take the three-into-one challenge out of the media spotlight.”
“This would ease the pressure a little,” he added.
Entrepreneur Richard Branson is the largest shareholder in Virgin Media with a 10.5 percent stake. He also licenses the Virgin name to the company and gets paid for promotional appearances.
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