Virgin has rebuffed suggestions that would-be suitors for Virgin Media will pull the plug on the brand and has given its strongest indication yet that it will invest more in the cable company rather than sell out.
Private equity houses and consortia including Carlyle and Permira are vying to buy Virgin Media, which was created by the merger of NTL and Telewest last year. The merged entity also acquired Virgin Mobile and licensed the name, with Virgin Media officially launching in February this year.
However, a series of rows with bitter rival BSkyB, including the pulling of Sky’s basic channels on cable in March, have led observers to suggest the launch was “fluffed” and that Sir Richard Branson is keen to pull out rather than extend his group’s holding.
Virgin Group spokesman Will Whitehorn, a key lieutenant of Branson’s empire, says: “The indication is that we would stay in rather than leave, or even increase our stake. There is no indication of axing the name whatsoever.”
The licensing agreement is for 30 years although it can be terminated after ten subject to a one-year notice period. However, the brand licence is subject to early termination in certain circumstances such as a change of control of the holding company.
Whitehorn says, however, that that termination could only come through Virgin, with sources suggesting such clauses are common across other Virgin licensed brands, such as Radio.