Liberty Global Inc. (NASDAQ: LBTYA), controlled by American billionaire John Malone, made a successful offer to buy huge U.K. cable firm Virgin Media Inc. (NASDAQ: VMED). The media has pegged the price as high as $23 billion. With debt backed out, the number is closer to $16 billion.
The press has made out that the Malone move is a challenge to Rupert Murdoch, who also has TV interests through his large ownership in BSkyB.
The Wall Street Journal reports:
Virgin Media, the U.K.’s No. 2 pay-TV operator with close to five million customers, said earlier Tuesday that it was in talks with Liberty Global “concerning a possible transaction,” without detailing what form any deal would take.
Liberty and Virgin said they expect about $180 million in annual cost savings once the companies are fully integrated. “We think we’ve been conservative with that number,” Liberty Chief Executive Mike Fries said in an interview. “The synergies are traditionally coming from areas like network and IT and procurement. What we do every day is buy technology from the same vendors and negotiate contracts from the same programmers.”