* Liberty to buy Virgin Media for around $15.75 bln
* Says deal is about expanding European presence
* Sees no fight over premium content
* Rival bid unlikely, say analysts
By Paul Sandle
LONDON, Feb 6 John Malone's Liberty Global
will avoid a battle with Rupert Murdoch's BSkyB
over expensive content like English Premier League
soccer, the U.S. company said after agreeing to buy BSkyB's
Liberty is buying Virgin Media for about $15.75
billion in stock and cash, pitting Malone against his old rival
Murdoch in British pay-television and broadband.
Both Virgin Media and Liberty Global said the deal, worth
more than $23 billion including debt, was more about expanding
the U.S. group's presence in Europe than shaking up British
Virgin Media had a strong commitment to share content with
Sky, Liberty Global Chief Executive Mike Fries said on
Wednesday, and he wanted to make sure Virgin Media had access to
"We do not see any reason why that would change or any
reason why Virgin Media needs to compete with Sky for that
premium content," he told reporters.
Liberty will serve 25 million customers in 14 countries
after the deal, overtaking ComCast as the world's
number-one cable TV operator by subscriptions, Fries said.
Virgin Media, which has 4.9 million customers compared to
BSkyB's 10.7 million, was formed when cable groups Telewest and
NTL and mobile telecom operator Virgin Mobile merged in 2006.
That deal was led by Virgin Group's Richard Branson, who
still owns around 3 percent, and who will make about $316
million from the Liberty takeover.
KEEPING THE PEACE
Virgin Media's first few years were marked by lengthy and
costly legal fights with BSkyB over access to channels and
More recently, however, Virgin Media boss Neil Berkett has
stabilised the group, taking it into the black two years ago
after years of losses racked up in a costly network expansion.
In a peace deal in 2010, it sold BSkyB a package of channels
and offered some Sky high-definition channels to its own
Since then, Virgin Media has focused increasingly on selling
high-speed broadband and technological innovations such as
digital TV service Tivo.
Fries, who turned 50 on Wednesday, said he would not risk
the stability of the market by engaging in new bidding wars.
"Neil's done a great job with building a strong relationship
with Sky that is not based on personalities or drama," he said.
Last year, BSkyB and telecoms operator BT signed a
three-year deal worth 3 billion pounds to show English Premier
League matches, cementing the league's position as the most
valuable domestic soccer competition in the world.
VIRGIN MEDIA RESULTS
Virgin Media said it added 42,700 new cable households and
62,700 cable broadband connections in the fourth quarter, its
best customer additions in four years according to analysts.
Citi said the results proved that the "rude health" of
Britain's broadband market was still in evidence.
Fries said the critical players in Britain - BT, BSkyB and
others - had reached stability in pricing and products.
"We get the sense it is a rational, competitive market,
where there is reasonable pricing stability and reasonable
customer growth, at least for Virgin (Media)," he said.
Fries said Liberty had admired Virgin Media for some time
and decided to strike now because of availability of financing
and the groups' relative stock prices. Shares in Liberty Global
have soared more than 80 percent in the last 12 months.
Virgin Media's New York-traded shares jumped 18
percent to $45.61 after the deal was confirmed on Tuesday.
Liberty will pay about $47.02 for each Virgin Media share based
on Tuesday's closing prices, using cash and shares of its class
A and C stock.
Liberty Global would not launch a major expansion of Virgin
Media's cable network, which covers around half of Britain's
households, choosing instead to invest in product innovation and
increasing broadband speed, Fries said.
Analysts said there was little chance of a rival bidder and
that was reflected in Liberty's offer.
"It is difficult to see where a counter-bid could come from
at this time," said brokers at Espirito Santos.
Berkett said he would step down once the deal was complete.
"My preference is to step down at closure," he said. "I'm not a
very good number two."