US-traded shares in Virgin Media rocketed more than 9% yesterday on speculation that the cable company could be a takeover target.
Shares in Virgin Media, which launched earlier this year from the merger of NTL, Telewest and Virgin's mobile phone division, rose to $27.10 in electronic trade from a close of $24.85 on the Nasdaq.
However, the stock fell back to $26.65, up just $1.80, at the end of the session in New York.
Rumours centred around a private equity consortium headed by US-based Providence Equity Partners, which reports said was considering making a $15bn (£7.5bn) approach for Virgin Media.
Yesterday's rumours about Providence's intentions come less than a year after the American private equity group was first mooted to be in talks to buy Virgin Media - then known as NTL until its rebrand earlier this year.
It is thought that Providence is keen to revive takeover efforts to take advantage of Virgin Media's current troubles. The broadcaster is in a high-profile dispute with rival BSkyB.
The group reported a fall in customer numbers in its first quarter results and warned of more to come as a result of a long-running row with BSkyB over contract renewal terms for the basic Sky channels.
The dispute, about how much BSkyB should get for its channels being shown on the Virgin Media cable system, led to BSkyB taking its basic channels off the network in February.
That means Virgin Media, which carried hit programmes such as Lost and 24, is no longer screening them. The company declined to comment on the takeover speculation.
It is reported that Providence is talking to fellow private equity groups Kohlberg Kravis Roberts, Blackstone and Cinven about making an approach within weeks.
The bid rumour follows the latest instalment in the Virgin Media - BSkyB dispute late last week, which saw BSkyB issue a statement saying Virgin Media had rejected its most recent attempts to find a solution - a claim denied by the cable firm.
Relations between the two groups have soured since BSkyB scuppered Virgin Media's plans for a £5bn takeover of ITV last November by buying a 17.9% stake in the commercial broadcaster.
The controversial move by Sky could now be scrutinised by the Competition Commission after an Office of Fair Trading investigation found the holding threatened ITV's independence.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article