Virgin Media target for Private Equity Groups

Morden · 09-03-2008, 14:15

In todays Observer Business pages :- http://www.guardian.co.uk/business/2...richardbranson

piggy · 09-03-2008, 15:55

i dont think it will happen myself but if it did it wouldnt make any difference on the ground as we are running a barebones outfit now there is no fat left!!

smiler316uk · 10-03-2008, 07:08

Quote:

Originally Posted by piggy

i dont think it will happen myself but if it did it wouldnt make any difference on the ground as we are running a barebones outfit now there is no fat left!!

but if it did happen ,do you think when and if virgin media has been sold the new owners would carry on with expansion, creating new cable areas and also giving us more channels

piggy · 10-03-2008, 10:23

Quote:

Originally Posted by smiler316uk

but if it did happen ,do you think when and if virgin media has been sold the new owners would carry on with expansion, creating new cable areas and also giving us more channels

thats the million dollar question!! new cable areas no, more channels no, faster bb with the phorm "enhancement" yes....of course this is just my opinion

smiler316uk · 11-03-2008, 14:00

Quote:

Originally Posted by piggy

thats the million dollar question!! new cable areas no, more channels no, faster bb with the phorm "enhancement" yes....of course this is just my opinion

yer this phorm thing is a cause for concern but id have thought if they are going to put in a bid,they would have to have some kind of strategy...some things they would like to do to help get the debt down,as they would have to buy the debt as well

Morden · 12-03-2008, 20:11

Well in Holland the main cable company there was bought over by privaye equity companies who grew the business for 4 to 5 years then sold off at major profits.

If a private equity company takes a similar long view here they can make virgin into a company that is a threat to SKY's profits.

I remember Branson saying in an interview recently that his prefered optiion for virgin would be private equity and that he may even increase his stake in the company should this happen.

He does a dim view of the city, buying back Virgin stores after its 1st share selloff as the shareholders wanted what was best for them not the company.

That is one advantage of private equity, not saying all private equitys run that way, especially if you are a highly profitable company already before they take you over. As then they then look at asset stripping, but in the case of virgin this is unlikely. I would guess that they are taking the long view for IP TV, streaming of high def movies and other emerging technologies as the only stable platform that can handle these effectively is a Fibre optic network, of which there is only one that reaches the majority of the UK.

But the network needs upgrading and expanding into new builds to reach its potential. Thats were inverstors may look for future profits, especially if they play the long game. e.g. buy cheap and sell for 5 times the buy value.

WHISTLED · 12-03-2008, 20:26

You only have to look at the substancial customer base and multiply by the average customer spend to see its a very good business on paper.

Dave9946 · 13-03-2008, 00:35

If he did'nt sell last year like was expected. Why would RB sell now when it's a much better money making company?.

Sure, because it's making more money against losses you might say. But the way I see it why take over and sell just like that for a few million quid proffit. When it does the parent company (Virgin Media) more harm than good to spend so little time branding a company at the cost of tens of millions, and then knowing that cost is wasted in having to re-brand the company yet again any then re-branding that companys main known channel of Virgin 1 to something completly different under new ownership. And then in theory or new ownership having to re-negosiate program deals all over again!.

It just dont make sence to sell-up when ITV is there for the taking if RB so wants it!.

Morden · 13-03-2008, 18:27

1. RB doesnt own Virgin he owns 10% and gets a royalty fee for the use of the virgin brand name.

2. If you read my last post he has said that should private equity buy the company over he may well increase his stake as there will be no share holders to answer to.

3. The costs of buying ITV are too expensive and they also need major investment and have litte assets. Their income stream is dependent upon advertisers who are flocking to the internet to spend their pennies.
4. AS I also said in previous emails Virgin prefer to do without share holders having as large a say as they do in Virgin Media. Who are the main reason we get a crap service as they want their few sheckkles rather than invest in the network. And are probably the reason for Outsourcing of the helpdesk. Case in point Virgin media mobile only use UK helpdesks and even call you back to make sure your problem is resolved. Infact last time I spoke to them the operator said that they view themselves as seperate frpm the cable part. So that may ne why we get 2 tier service.