[Physci]

Financial newswire (Mergermarket) saying that the sale process has started:

Virgin Media, the US-listed and UK-based media company, has launched the disposal of its TV content arm by sending out sale documents to potential acquirers, according to a source close to the situation.

The source said an information memorandum had been sent out for the Virgin Media business, which has a number of wholly-owned channels in the UK and Ireland and digital terrestrial television, satellite television and cable television platforms. UBS is advising Virgin. The source said the IM did not include documents on UKTV, a 50:50 joint venture with BBC Worldwide, the commercial arm of the public broadcaster, which is also part of Virgin's content arm. He said there were no immediate plans to send out an IM on UKTV. “There is no visibility on this [UKTV],” he added. A Virgin spokesperson said they could not comment on the issue.

A second source involved in the process said the confirmation earlier this month of the departure of Malcolm Wall, the chief executive of Virgin Media’s content business, removed an obstacle to the sale process. “Malcolm Wall was the key block to the deal, and with him out, a deal is a lot more likely. It has the support of the board of Virgin in NY and [Richard] Branson,” said the second source.

The second source said a sale of UKTV is more complicated because BBC Worldwide has the right to veto the buyer. The entire business, including UKTV, is worth between GBP 420m (USD 605m) and GBP 500m, according to recent reports. The second source added: “Many players have been looking but we’re yet to see the colour of their money.” He said bidders that have been sent the IM include NBC and Liberty Media. RTL, Disney and BSkyB are also believed to have been sent the documents, said the second source, but he thought they were less likely to be interested in the assets.

A sector banker said that taking UKTV, out of the equation, the assets weren't worth more than GBP 150m. "Nobody will pay much more than that," he said. This banker added that it could be a good add-on for Sky. and that RTL was probably not going to buy it because it did not have a presence in Pay TV channels in the UK.

The second source said he thought first round bids for Virgin TV, which included the brands Virgin 1, Living and Bravo channels was expected in April, with the deal expected to be closed by the end of June. The Virgin spokesperson said that the sale process was not linked to an agreement by Virgin’s lenders to delay its GBP 4.3bn debt repayments to 2012. “There were no terms relating to assets disposals,” said the spokesperson. “It was to give management time to run the business.”

By Lawrie Holmes, Mariana Valle & Beranger Guille