[gunner45]

Originally Posted by Chrysalis

I think we need to get round this, because in effect this is separation only exists for regulatory reasons.

For example I could setup a retailer, and a wholesaler as two separate companies, on paper they are fully independent from each other, but it would be nonsense to claim they are independent when I own both companies.

Liberty global who own Virgin Media are a shareholder of Nexfibre, so lets stop the pretence there is no shared ownership. This is a structure for accounting and regulatory benefits. Telefonica are also a shareholder. The CMA rightly so have seen through it.

Its hard to have a rational discussion on here, as the forum is filled with VM affiliates.

But my view is this, if we have already decided politically VM should be able to do a hostile take over, then we may as well have no CMA, the CMA exists to protect against these sort of events.

The argument seems to be that we should have no alt nets moving forward, they have no business setting up in this country, they will be gone in X amount of years.

My counter to that is, the CMA should make a decision based on whether they think the merger would create significant market power and hurt competition.

But apparently the CMA instead should be considering the health of Virgin Media, and whether they think Netomnia will survive if the merger is declined, yet Netomnia is more financially healthy than VMO2.

The only time that VMO2 should perhaps get "assistance" in gaining control of the Netomnia, is if the company is indeed about to get liquidated, and there is simply no other options on the table, then the likes of me would support it. Until that day comes then patience is required.

As an example this is a reasonably accurate headline to state VMO2's owners are doing the acquisition rather than Nexfibre is doing the acquisition..

https://www.ft.com/content/cb3ffce2-...syn-25a6b1a6=1

So whether VMO2 own the infrastructure or Nexfibre, is moot, as the same companies own it regardless.

---------- Post added at 22:44 ---------- Previous post was at 22:29 ----------



The need to flip for inflated profit is more important than a healthier market?

CityFibre are also an investor.

There is no 'pretence there is no shared ownership' as it's a matter of public record in filed accounts that nexfibre is 50% owned by InfraVia Capital Partners and 50% by Liberty Global and Telefónica, SA, and VMED O2 UK Limited (Virgin Media O2) is a 50:50 joint venture between Liberty Global and Telefónica, SA. Although there is some shared ownership they are separate companies and, crucially, it's InfraVia that is funding nexfibre. It's also InfraVia which is putting up the bulk (£850m) in new net equity funding for the proposed acquisition of Netomnia with Liberty Global and Telefónica, SA putting up the remaining £150m. There is also a £1.1 billion commercial and wholesaling agreement whereby nexfibre's sister company, Virgin Media O2 (VMO2), is guaranteeing a massive, long-term wholesale traffic commitment covering 4.6 million homes. In exchange for moving its broadband traffic onto nexfibre's network infrastructure, VMO2 receives an indirect 15% stake in nexfibre alongside roughly £1.1 billion in equivalent structural cash value. It's this agreement which CMA is objecting to.

I take issue with you saying 'Its hard to have a rational discussion on here, as the forum is filled with VM affiliates.' as I've made a number of rational posts on this subject and not once have you refuted the points I made.

You think that 'the CMA instead should be considering the health of Virgin Media, and whether they think Netomnia will survive if the merger is declined, yet Netomnia is more financially healthy than VMO2'. That is not the issue which is this: the CMA has to consider whether heavily indebted CityFibre is a credible buyer of Netomnia, and I've made a post that CityFibre is in no way a credible buyer as it's owners will never do it with their focus on stabilisation rather than acquisition. If the CMA blocks this £2.1bn deal, the ultimate irony is that this would have achieved the exact opposite of its intended goal. If the creditors take over by a debt-to equity swap (most likely) to stabilise the business for sale, Netomnia stops building entirely — effectively reducing the UK's active fibre construction market from three biggest players down to two.

And there's more: nobody else would remotely match the £2.1bn proposal for Netomnia, and the great majority of altnets would be aghast if this happens as they will be up for sale as this sends a signal that the deepest-pocketed buyer in the market is legally barred from acquiring them. Also why would international infrastructure funds and private equity firms bother to make further investments in the UK if they can be blocked from selling to the highest bidder?