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Virgin Media in talks to possibly acquire City Fibre, for £3bn
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Old 19-03-2023, 00:43   #1
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Virgin Media in talks to possibly acquire City Fibre, for £3bn

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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 Cityfibreís 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.
https://dailybusinessgroup.co.uk/202...for-cityfibre/

Original Telegraph article, paywalled: https://www.telegraph.co.uk/business...bid-cityfibre/
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Old 19-03-2023, 09:12   #2
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by 1andrew1 View Post
Not implausible, but i donít see where the value is in that acquisition.

City Fibre is not just an Altnet, theyíre also a carrier, with national core network acquired from Torch, that VM doesnít need but would be priced in to any deal.

VM just needs the FTTP access network.

VM buying smaller Altnets where they donít currently have a footprint makes more sense.
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Old 19-03-2023, 09:19   #3
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

Would it make more sense for Nexfibre to buy City Fibre?

Nexfibre would have an immediate footprint, wholesale agreements in place from which it could start to build out and almost overnight expand the footprint for VM (albeit with some overlap)
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Old 19-03-2023, 12:07   #4
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

Providers merging has been a thing for many years and i can see it continuing. The Altnets will ether make money and prosper or will be snapped up by the big players as they go bust.
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Old 19-03-2023, 13:31   #5
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by Pierre View Post
Not implausible, but i donít see where the value is in that acquisition.

City Fibre is not just an Altnet, theyíre also a carrier, with national core network acquired from Torch, that VM doesnít need but would be priced in to any deal.

VM just needs the FTTP access network.

VM buying smaller Altnets where they donít currently have a footprint makes more sense.
It would boost the number of broadband and TV customers, surely.
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Old 19-03-2023, 13:54   #6
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by Pierre View Post
Not implausible, but i don’t see where the value is in that acquisition.

City Fibre is not just an Altnet, they’re also a carrier, with national core network acquired from Torch, that VM doesn’t need but would be priced in to any deal.

VM just needs the FTTP access network.

VM buying smaller Altnets where they don’t currently have a footprint makes more sense.
Whilst I felt CF was the least likely to be taken over it does make sense for VM.

VM have plans to rollout FTTP (in their existing areas), and like VM, CF has concentrated on cities, indeed, CF are currently rolling out to the majority of my city, and VM also covers most of it, they would be basically buying the infrastructure which will make things much easier for VM on their rollout.

However the downside will be reduced competition, my city has currently no openreach FTTP, and CF were looking set to have a monopoly in most of the city on FTTP with VM been their only competitor some years later, if this takeover happens VM will have that monopoly instead, CF support IPv6 etc. whilst VM dont. so as a consumer I would rather VM build their own FTTP instead of taking over CF, but it does make sense for VM to buy CF assuming the cost isnt too dissimilar or cheaper than doing their own rollout. Bear in mind CF did much of it before costs have skyrocketed, so the maths have changed.

Last edited by Chrysalis; 19-03-2023 at 14:02.
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Old 19-03-2023, 14:32   #7
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by Inactive Digital View Post
Would it make more sense for Nexfibre to buy City Fibre?

Nexfibre would have an immediate footprint, wholesale agreements in place from which it could start to build out and almost overnight expand the footprint for VM (albeit with some overlap)
If it was to go ahead, that would be the logical angle.
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Old 19-03-2023, 15:45   #8
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

Irrelevant to me, according to their site, they havent even "planned your area at the moment".
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Old 19-03-2023, 18:09   #9
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

City fibre have been digging up everything here for weeks despite VM being fully cabled up. Not sure what the synergy would be here?
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Old 19-03-2023, 19:21   #10
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by heero_yuy View Post
City fibre have been digging up everything here for weeks despite VM being fully cabled up. Not sure what the synergy would be here?
VM are planning to roll out FTTP in all docsis areas. Hence the interest.

Plus they would kill an ultrafast competitor.
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Old 19-03-2023, 20:32   #11
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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VM are planning to roll out FTTP in all docsis areas. Hence the interest.

Plus they would kill an ultrafast competitor.
How so?
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Old 19-03-2023, 20:33   #12
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

Maybe because they are not a competitor if you own them.
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Old 19-03-2023, 20:39   #13
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by Chrysalis View Post
VM are planning to roll out FTTP in all docsis areas. Hence the interest.

Plus they would kill an ultrafast competitor.
Theyíre rolling out XGS-PON on their footprint using their existing duct infrastructure. Buying CF which uses, largely, PIA on 50% of the same footprint doesnít really stack up.

Itís a good headline but just I donít see it.
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Old 19-03-2023, 20:39   #14
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Maybe because they are not a competitor if you own them.
Then they'll have to buy up every other AltNet provider including those who offer 1Gb symmetrical connections.
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Old 19-03-2023, 23:30   #15
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Re: Virgin Media in talks to possibly acquire City Fibre, for £3bn

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Originally Posted by pip08456 View Post
How so?
I have been corrected elsewhere, it seems the deal is between Liberty global, Telefonica and InfraVia via a venture called Nexfibre.

VMO2 would be the anchor tenant, and wholesaling would remain (so would at least still be retail competition, just not infrastructure competition).

---------- Post added at 23:30 ---------- Previous post was at 23:28 ----------

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Then they'll have to buy up every other AltNet provider including those who offer 1Gb symmetrical connections.
Well my comment was just my city, my city only has 1 provider doing any reasonable coverage which is CF (Openreach just under 25% only in student areas), the only other altnet rollouts are just for a few streets or specific apartment buildings, however it does seem I was wrong on if it would still be wholesaling, please check my previous comment above this.
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