Virgin.net seeks buyer

June 6, 2001
Web posted at: 0930 GMT

LONDON (CNN) -- Virgin chief Richard Branson is stepping up his efforts to sell his UK Internet service provider Virgin.net as the sector consolidates.

Virgin and the cable company NTL (NTLI: Research, Estimates) , who are co-owners, have appointed Lehman Brothers (LEH: Research, Estimates) to find a buyer, the Financial Times reported on Wednesday.

The move comes three months after an agreement for NTL to buy full control of the ISP, which Virgin valued at about £240 million ($341 million), was torn up, the report said.

Under the deal, NTL would have taken Virgin.net's 600,000 dial-up Internet subscribers, while Virgin would have taken control of the company's entertainment and leisure portal.

A Virgin spokeswoman said on Wednesday the company had no comment at this stage on the report. But an NTL spokeswoman told CNN.com that there was nothing new in the story.

"[The sale] was announced four months ago and as Richard Branson owns 51 percent and NTL 49 percent, it's Virgin's decision. But we have been aware they have been trying to sell it for months now."

Virgin.net claims a top five position among UK ISPs, but it is unlikely to be an easy sale. There are a number of second-tier ISPs already on the market in the UK and few buyers, the report said.

British Telecom (BT-A) and United Business Media took more than five months to find a buyer for LineOne.

They were forced to settle for about one third of what they hoped for when the sale was agreed to Italian ISP Tiscali for 100 million ($85 million) in April.

Tiscali, which is attempting to overtake T-Online, the Internet unit of Deutsche Telekom (DTE), as the biggest ISP in Europe has been on a buying spree for the past year.

Other potential buyers could include T-Online (ATOI) and Wanadoo,  the Internet arm of France Telecom (FTE) which last year bought Freeserve, the UK's biggest ISP.

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Tiscali posts annual loss – March 28, 2001

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