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Cable Cowboy lassoes Virgin Media with HUGE £15bn deal

John Malone to be new sheriff in town as Neil Berkett quits

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The world's second biggest cable company - Liberty Global - has confirmed its plans to buy British ISP Virgin Media for $23bn (£15bn), after the telco said on Tuesday it was in talks with the corporation run by American billionaire John Malone.

That stock and cash deal, which would gift Englewood, Colorado-based Liberty Global with the “the world’s leading broadband communications company” - with 25 million subscribers to its television, broadband and telephony products across 14 countries - is subject to regulatory and shareholder approval.

Virgin Media shareholders can expect to receive $17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares for each VM share they hold, the telco said.

Liberty Global will pay $47.87 per Virgin Media share - a 24 per cent premium on the company's closing price on 4 February.

Virgin Media, which has more than 5 million subscribers on its books, is to retain its brand under the proposed acquisition with the deal expected to close in the second quarter of this year.

The move also means Malone - who is known as the Cable Cowboy - will be butting heads with British pay-TV giant BSkyB, which is more than 39 per cent owned by media mogul Rupert Murdoch's News Corporation.

The two men have form, tussling over Murdoch's News Corp a decade ago when Malone's Liberty Media tried to take control of the US satellite television broadcaster DirecTV Group.

At that point, Malone's company had a significant but not controlling stake in News Corp of 16 per cent and the Cable Cowboy had been critical of Murdoch's "empire building".

An $11bn asset swap between the two doused the fiery spat - with Murdoch grabbing the shares in NewsCorp that Liberty had acquired in exchange for handing Liberty a controlling interest in DirecTV.

The merger announcement came on the same day that Virgin Media reported its results to the City. Net income for the full year hit £2.8bn compared with £75.9m in 2011, while total revenue in 2012 grew 2.7 per cent to £4.1bn.

Meanwhile, Virgin Media's CEO Neil Berkett - who already appeared to hint at his exit in a reflective statement about Liberty Global's planned merger - has confirmed he will leave the company once the deal is completed. He said: "I am not a very good number two." ®

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