News
Virgin Media parent Liberty Global looking at options, private equity firms reportedly mulling 10 billion bid.
Speculation about the future of O2 UK is already rife following the European Commission’s decision to block its sale to 3UK parent CK Hutchison, with private equity firms and Virgin Media parent Liberty Global named as possible suitors.
Sky News reported on Thursday that Apax Partners, CVC Capital Partners, and KKR are considering a joint offer to O2 owner Telefonica worth £10 billion (€12.71 billion).
According to the report, some of the suitors have held preliminary talks with bankers about financing a takeover.
Liberty Global might also emerge as a possible buyer of O2, judging by comments made by CEO Mike Fries on the company’s investor call, which took place this week before the EC issued its decision.
"We look at all options in a marketplace, and it would be strange if we didn’t evaluate that option," he said.
However, he insisted that he is confident in the future of Virgin Media’s MVNO business – which operates on EE’s network – regardless of what happens to O2.
Another option said to be under consideration by Telefonica is a possible stock market listing of O2. The Spanish incumbent was banking on the Hutch deal to help pay down its debt, which stood at €50.21 billion at the end of March.
Telefonica chairman José María Álvarez-Pallete said in a report by Reuters on Thursday that his company will enter "a period of reflection to decide what is the future of our business in the United Kingdom."
As expected, Brussels on Wednesday officially blocked CK Hutchison’s proposed £10.25 billion acquisition of O2 UK. Competition commissioner Margrethe Vestager said approving the deal would have left consumers with less choice and higher prices, and would have hampered the development of network infrastructure.
CK Hutchison is considering its options, including a possible legal challenge to the decision.
