Reports indicate that Virgin Media has hired Goldman Sachs to examine its TV operation with a view to selling off certain assets so as to help fund its Video-on-Demand, telephone and broadband services development.
The Sunday Times piece estimates that an outright sale of Virgin Media Television could raise £800m, although the group may hold onto its core infrastructure and merely dispose of some content elements:
The most likely course of action is that it will try to find a buyer for the jewel in its crown, the half-share in UKTV which it owns in partnership with BBC Worldwide, the corporation’s commercial arm.
UKTV owns channels such as UKTV Gold and UKTV History. Because its borrowings are capped at £350m, BBC Worldwide does not have deep enough pockets to buy out Virgin, but a change-of-control clause gives it approval over any new partner.
Meanwhile, Virgin is thought to be keen to retain and add to its portfolio of shopping channels. The company considered a sale of its content arm, then called Flextech, when NTL merged with Telewest in 2005 to create Virgin. But the plan was vetoed by the board, chaired by Jim Mooney.
Certainly VM will need a lot more cash if it is to turn forthcoming 'up to' 50Mbps broadband products into a service that doesn't just advertise a fast speed but can deliver it too. Credits to Thinkbroadband for spotting the link.
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