Virgin Media is readying itself for a massive takeover bid as it confirms it is currently in talks with US cable and broadband operator Liberty Global over a "possible transaction".
Leaked on Monday night by the Financial Times, which cited sources close to the discussions, the news provoked Virgin Media into responding with confirmation that it had been having discussions with the worldwide media organisation.
"Virgin Media confirms that it is in discussions with Liberty Global, a leading international cable company, concerning a possible transaction," it said in a statement released to press. "Any such transaction would be subject to regulatory and other conditions."
Liberty Global is an international television and telecommunications company with stakes in broadband and TV service companies across Europe, the US and Australia. It is reported that its chairman, John Malone, has been looking to make inroads into the UK for some time, with Virgin Media a target.
It is also reported that, should a deal go through - Virgin Media has an enterprise value of more than $20 billion, so it would be a massive "transaction" - it would allow Liberty Global to buy equipment and technologies at more reasonable rates than currently, as it would be able to spread them across all of its similar concerns.
Whether it would retain the Virgin name is unknown. At present, Virgin Group holds less than 3 per cent of Virgin Media, with the company paying what is in effect a licence fee for the brand name. If Liberty Global takes over, it may continue to do so, especially as it has retained the name of other localised acquisitions in the past.
After the Financial Times's revelations, Virgin Media's share price leapt by 14 per cent on the London stock exchange.