Liberty Global in talks to merge Virgin Media with O2

[denphone]

Liberty Global in talks to merge Virgin Media with O2.

https://www.ft.com/content/100cc6d1-...a-7b159cf39112

(Behind Paywall)

Non-paywall site.

https://www.reuters.com/article/us-t...-idUSKBN22D5YD

[Brunel]

OR: https://www.ispreview.co.uk/index.ph...ger-talks.html

[newapollo]

I wonder if this will have any effect on the proposed switch to Vodafone for mobile due late next year

[1andrew1]

Originally Posted by denphone

Liberty Global in talks to merge Virgin Media with O2.

https://www.ft.com/content/100cc6d1-...a-7b159cf39112

(Behind Paywall)

Interesting. I wonder if this might flush some counter-offers out? Vodafone might be tempted by VM now that an external value has been placed on VM. And Comcast may be tempted to buy O2.
However, if the combination of O2 and VM does take place, VM-O2 will be the mobile carrier for Sky potentially raising the chances of Sky Atlantic appearing on the V6.

[Pierre]

Was originally bandied about 3 years ago and discussed on here.

https://www.cableforum.uk/board/show...&postcount=137

Makes more sense than Vodafone.

VM still has a large amount of debt........and cash. Vodafone spent a large wedge buying LG Germany and other operations.

So I see a Vodafone deal about as likely as it’s always been.

Since LG has been sitting on the pile of cash it got from Vodafone it’s been trying figure out what to do with it.

So this deal could have legs.

---------- Post added at 09:39 ---------- Previous post was at 09:36 ----------

Originally Posted by 1andrew1

Vodafone might be tempted by VM now that an external value has been placed on VM.

I missed that bit, what figure was placed on VM?

[pip08456]

Originally Posted by 1andrew1

Interesting. I wonder if this might flush some counter-offers out? Vodafone might be tempted by VM now that an external value has been placed on VM. And Comcast may be tempted to buy O2.
However, if the combination of O2 and VM does take place, VM-O2 will be the mobile carrier for Sky potentially raising the chances of Sky Atlantic appearing on the V6.

Link please.

[denphone]

Originally Posted by pip08456

Link please.

l have not seen one link that puts a external value on VM and l have seen a few articles up to now.

[pip08456]

Originally Posted by denphone

l have not seen one link that puts a external value on VM and l have seen a few articles up to now.

Neither have I. Andrew must have dreamt it.

[Kushan]

The value would be placed as soon as (if) O2 makes the offer, I guess. I've seen Vodafone + Virgin mooted for a long time now, I am not convinced it'll ever happen. O2 seems like a bigger possibility, Telefonica has been trying to sell it off for years.

[1andrew1]

Originally Posted by Pierre

I missed that bit, what figure was placed on VM?

The fact that Liberty will be paying Telefonica an additional amount shows that a valuation has been done.

I'm inclined to agree that on paper, O2 is a more likely combination for VM than Vodafone. But I wonder if Comcast/Sky might try to gate crash the merger so that it does not have such a strong competitor. If Comcast/Sky is successful, this could lead to VM and Vodafone or VM and Three merging.

We also don't know 100% if VM Ireland is included in the VM-O2 merger as that is a market O2 has withdrawn from.

[Pierre]

Well no figure has been provided but considering LG bought VM for around 23 Billion dollars 7 years ago and O2 was valued at £10 billion 5 years ago I would be interested in how VM would be the lesser partner in a 50:50 merger that they would have supplement the deal with cash.

Now if LG/VM were to “buy” O2 in a stocks and cash offer, then obviously I could see cash payment.

[1andrew1]

Originally Posted by Pierre

Well no figure has been provided but considering LG bought VM for around 23 Billion dollars 7 years ago and O2 was valued at £10 billion 5 years ago I would be interested in how VM would be the lesser partner in a 50:50 merger that they would have supplement the deal with cash.

Now if LG/VM were to “buy” O2 in a stocks and cash offer, then obviously I could see cash payment.

As you say, VM was bought in 2013 for £15bn some seven years ago. A lot can happen in seven days let alone seven years but I too am surprised to see it valued at less than O2. Per the Bloomberg article, New Street Research has valued O2 UK at £12.6bn ($15.8bn).

The Daily Telegraph says we should know more of the details on Wednesday so there could be a bit more to the transaction than what has been reported to date. For example, is it possible that Virgin Mobile may not be included due to potential competition issues? An O2 UK-VM combination will take their combined mobile market share above 29% which normally triggers an enquiry by the UK competition authorities. Perhaps Liberty Global may sell the VM mobile customer base separately to another provider like Three?

[Pierre]

Originally Posted by 1andrew1

As you say, VM was bought in 2013 for £15bn some seven years ago. A lot can happen in seven days let alone seven years but I too am surprised to see it valued at less than O2. Per the Bloomberg article, New Street Research has valued O2 UK at £12.6bn ($15.8bn).

The Daily Telegraph says we should know more of the details on Wednesday so there could be a bit more to the transaction than what has been reported to date. For example, is it possible that Virgin Mobile may not be included due to potential competition issues? An O2 UK-VM combination will take their combined mobile market share above 29% which normally triggers an enquiry by the UK competition authorities. Perhaps Liberty Global may sell the VM mobile customer base separately to another provider like Three?

All kinds of variables there.

I don’t think there will be a competition issue. You would still have 4no. Network operators. I’m not including MVNOs.

This will be interesting, I suppose we’ll just have to wait until Wed.

---------- Post added at 21:38 ---------- Previous post was at 20:40 ----------

Some further analysis

https://www.graystonestrategy.com/vi...iew-on-things/

[1andrew1]

Originally Posted by Pierre

All kinds of variables there.

I don’t think there will be a competition issue. You would still have 4no. Network operators. I’m not including MVNOs.

This will be interesting, I suppose we’ll just have to wait until Wed.

Yes, it will be interesting but probably concerning for some employees in those two companies.
The number of players in the market is not normally considered, but how you define a) the market and b) market share is key.