Virgin Media drags feet on deal

Virgin Media vmed said Tuesday that it is extending its strategic review of the company, effectively delaying an auction, because of volatile credit markets.

Virgin, which is listed on the U.S.-based Nasdaq Stock Market although it operates in Britain, said a month ago it had received an offer from an unidentified party.

People familiar with the talks later confirmed that a $11.4 billion approach came from the Carlyle Group, a private-equity firm. Since then, other private-equity firms have been suggested as suitors.

Virgin said Tuesday that "potential strategic and financial counterparties have … a strong, ongoing interest in a transaction."

However, it added that its financial advisers recommend it "extend the process until these parties can complete their proposals in a more stable debt market." It did not detail a timeline for the review.

Debt markets have been undermined by fears a credit squeeze will end an era of cheap funding for corporate takeovers.

Virgin, which licenses its name from its largest shareholder, entrepreneur Richard Branson, reported its seventh-consecutive quarterly loss in May after subscribers defected to rival satellite service BSkyB.

Virgin, the byproduct of a number of mergers, including the former cable operators NTL and Telewest and the mobile operator Virgin Mobile, was formed to create Britain's first "quadruple play" service, offering mobile phone, fixed-line phone, Internet broadband and TV services.

It has struggled, however, to provide solid services and recently invested substantially in revamping its customer service after scores of complaints.

Branson has a 10.5% stake in the company.