Owners Hang ‘For Sale’ Sign Over Virgin.net

06 June 2001

The UK ISP sector moved closer toward consolidation yesterday with the appointment of merchant bank Lehman Brothers to huckster Virgin.net, the jointly-owned business controlled by cable group NTL and fronted by Virgin Group’s rent-a-brand.

The hoped-for sale to a third party is the latest move in a convoluted saga stretching back to June 2000. NTL had planned to take full control of Virgin.net in exchange for £100 million in cash and shares, but the purchase was put in the deep-freeze three months ago after NTL had conducted due diligence.

Virgin.net claims to be number five among the nation’s ISPs and its leisure portal is popular. However, insiders believe that few rivals will regard it as an attractive buy. They point to the difficulties experienced by BT and United Business Media in unloading their jointly-owned LineOne, eventually selling it to hungry Italian ISP Tiscali for around one third of the original asking price.

News source: Financial Times