While cartoons and advertisements are a main attraction for Sunday papers in the U.S., in London it seems starting unsubstantiated deal rumors is a key draw to the Sunday papers. However,
Reuters' quashed a Sunday Observer report that a consortium of top-tier private equity firms are planning an LBO of Virgin Media. The
Observer, said that Providence Equity Partners Inc., Blackstone Group LP, Kohlberg Kravis Roberts & Co. and Cinven Ltd., were preparing to wade into the stormy waters of the credit markets and offer $6 billion to $7.5 billion for Virgin Media. Although the story is highly suspect, it doesn't venture too far from reality, since Virgin Media was, after all, a target last year.
Last July, just as private equity's "Golden Age" hit its peak, The Carlyle Group made an $8 billion to $10 billion ($30- $35 per share) offer for Virgin Media, that sparked an auction for the company; which quickly fell apart after the credit markets turned in August. And in 2006, Virgin rejected a reported $30 per share bid from the same group of bidders the Observer said was prepping for a new bid.
However, the chances of any private equity firms making an offer is suspect from the start since banks that would normally syndicate the debt underlying such a large deal are still sitting on about $200 billion in overhung debt from 2007's crop of buyouts, that they've been unable to get off their books. The chances of any bank committing to more debt that's almost guaranteed to stay on its books go from zero to nil. - George White
See story from Reuters story
See story from Observer
See story Virgin Media auction from TheDeal.com
