Credit crunch delays Virgin Media sale

Credit crunch delays Virgin Media sale
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First Published: Wed, Aug 08 2007. 12 10 AM IST
Updated: Wed, Aug 08 2007. 12 10 AM IST
London: UK’s second biggest pay-television operator, Virgin Media Inc., postponed sale of the company because a global credit crunch is threatening leveraged buyouts.
Buyers need time to make proposals “in a more stable debt market environment,” Hook, England-based Virgin Media said on Tuesday. The company put itself up for sale last month after Carlyle Group made a takeover overture. Virgin Media’s stock slumped 19% in the past month as banks became more reluctant to finance acquisitions.
Cadbury Schweppes Plc. had last week delayed the sale of its US drinks division, and banks cancelled the sale of loans for the purchase of Alliance Boots Plc. after failing to find investors. The pace of leveraged buyouts has cooled by more than 33% since June.
“There’s a shift in the market and a lot of potential private equity deals have been put on ice to see how the debt market responds,” said David Thomson, an analyst at Bryan, Garnier and Co. in London. “It’s difficult to see how this deal will develop.” The company, which will report its second quarter earnings on Wednesday, in May posted its seventh consecutive quarterly loss as subscribers continued to defect to BSkyB, UK’s largest pay-television operator.
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First Published: Wed, Aug 08 2007. 12 10 AM IST