Virgin Media 02 ponders £3bn bid for Cityfibre
Virgin Media O2 (VMO2) is said to be pondering a £3 billion takeover bid for rival broadband provider Cityfibre.
Mike Fries, chief executive of VMO2 parent company Liberty Global, has held initial talks with his Cityfibre counterpart Greg Mesch, according to sources.
Cityfibre is making progress in building its reach from two million to eight million properties by 2025. About half of Cityfibre’s network overlaps with VMO2 which is jointly owned by Liberty Global and Telefonica.
VMO2 Is believed to working with bankers at US-based LionTree, according to The Telegraph.
It is said that inflation is raising the cost of expanding broadband networks more expensive and making it harder to compete with BT’s Openreach.
Cityfibre, which has been active in Scotland and provides services to telecoms providers including Vodafone and TalkTalk, raised £4.9bn in debt financing last summer.
However, it lost almost £50m in 2021 and is shedding up to 400 jobs – a fifth of its workforce – as it seeks to control costs.