Billionaire John Malone & Co. in Talks to Acquire UK Cable Business (LBTYA) (VMED)

February 5, 2013 9:53 AM EST
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In what may shape up to be the largest media deal so far this year, reports late on Tuesday said Virgin Media (NASDAQ: VMED), a cable company in the UK, and Liberty Global (NASDAQ: LBTYA) (NASDAQ: LBTYB) were in talks about a potential merger. This morning Virgin Media confirmed talks are ongoing and said details on the transaction will come "in due course".

While Virgin Media operates in the UK, it is listed on the NASDAQ. It has been described as a cobbling of several small British cable companies, and it has an enterprise value of approximately $19.4 billion. Accounting for acquisition premium, the company could go for as much as $24 billion, say reports.

The would-be acquiring company, Liberty Global, operated in 13 countries, mostly overseas. However, its headquarters is in Colorado. Its chairman, billionaire John Malone, is a former business partner and competitor of Rupert Murdoch.

For those unfamiliar with John Malone, rumors say he once parked his tank on the lawn of Rupert Murdock. He has also been called the Darth Vader of the cable industry. Over the years, the two billionaires have been business partners and rivals, friends and bitter enemies.

Liberty Global has a controlling stake in DirectTV (Nasdaq: DTV), which it purchased from News Corp (NASDAQ: NWSA) in 2008. Liberty Global also has a controlling stake in Liberty Media (NASDAQ: LMCA), a company Malone once ran.

Billionaire Richard Branson has been cutting his stake in Virgin Media and holds just a 3 percent stake, according to the latest data.

Shares of Virgin Media are up 15.4 percent to $44.65 ahead of a potential deal.

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