UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 12, 2011
VIRGIN MEDIA INC.
(Exact name of Registrant as specified in its charter)
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Delaware |
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File No. 000-50886 |
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59-3778247 |
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(State of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
909 Third Avenue, Suite 2863, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (212) 906-8447
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibits | |
Item 1.01. Entry into a Material Definitive Agreement.
On August 12, 2011, Flextech Broadband Limited (“Flextech”), a wholly-owned subsidiary of Virgin Media Inc. (“Virgin Media”), entered into a sale and purchase agreement (the “SPA”) and related agreements with Southbank Media Ltd (“Southbank”), a wholly owned subsidiary of Scripps Network Interactive, Inc. (“Scripps”), relating to the sale to Scripps of Virgin Media’s interest in its UKTV joint venture with BBC Worldwide Limited.
Pursuant to the SPA and the related agreements, Flextech and other Virgin Media subsidiaries agreed to sell to Southbank their entire interest in the common and preferred equity, loan stock and other debt of UK Channel Management Limited, UK Gold Holdings Limited, UKTV New Ventures Limited, and UK Programme Distribution Limited for aggregate consideration of approximately £338.5 million (equal to approximately $550 million), which includes approximately £100 million for Southbank’s acquisition of preferred equity, loan stock and other debt of those companies. The consideration is subject to certain post-closing adjustments. Flextech presently holds a 50% equity interest in UK Channel Management Limited, UK Gold Holdings Limited and UKTV New Ventures Limited, and a 7.3% equity interest in UK Programme Distribution Limited, each of which is part of the UKTV joint venture. BBC Worldwide has waived certain pre-emption and other related rights in respect of the transfer of the shares and agreed to certain other matters relating to or connected with the transfer of the debt interests.
Virgin Media Limited, a wholly-owned subsidiary of Virgin Media, is also entering into a carriage agreement with UK Channel Management, UK Gold Services Limited and UKTV New Ventures relating to the distribution on Virgin Media’s cable network of standard and high-definition television channels operated by such parties from completion of the transaction contemplated by the SPA. Pursuant to the SPA, Flextech has also agreed to provide certain transitional services to the UKTV joint venture following completion of the transaction.
Completion of the transactions contemplated by the SPA is subject to certain conditions, including approval of the Irish Competition Authority and the expiry of the waiting period pursuant to the Irish Competition Act 2002 and the written approval of the Jersey Competition Regulatory Authority. The parties expect the transaction to close no later than December 21, 2011. If one or both of the regulatory conditions to closing have not been met or waived on or before December 21, 2011, the parties have agreed to use all reasonable endeavors to obtain an extension of BBC Worldwide’s waivers and consents up to and including fifteen business days after February 12, 2012, subject to the additional condition that the terms of the extension of closing are reasonably satisfactory to Flextech. If one or both of the regulatory conditions have not been met or waived by February 12, 2012, any party may terminate the SPA by giving five business days’ written notice to the other parties. The SPA terminates automatically if the extension is not obtained by February 12, 2012.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
As described in Item 1.01 of this Report, the following exhibits are filed as part of this Current Report on Form 8-K:
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Exhibit |
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Description |
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99.1 |
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Press release, dated August 15, 2011 issued by Virgin Media Inc. and Scripps Networks Interactive, Inc. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: August 15, 2011 |
VIRGIN MEDIA INC. | |
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By: |
/s/ Scott Dresser |
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Name: |
Scott Dresser |
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Title: |
Secretary |
Exhibit 99.1
Scripps Networks Interactive and Virgin Media
agree on UKTV transaction
For immediate release
Aug. 15, 2011
KNOXVILLE, Tenn. — Scripps Networks Interactive Inc. (NYSE: SNI) and Virgin Media Inc. (NASDAQ: VMED; LSE: VMED) have reached an agreement that will result in Scripps Networks Interactive acquiring Virgin Media’s stake in UKTV, one of the United Kingdom’s leading multi-channel television programming companies.
Scripps Networks Interactive will pay approximately £239 million to purchase Virgin Media’s 50-percent common equity interest in the UKTV partnership and also will pay about £100 million to acquire the outstanding preferred stock and debt owed by UKTV to Virgin Media. BBC Worldwide, the commercial arm and wholly owned subsidiary of the British Broadcasting Corp. (BBC), is the other 50-percent stakeholder in UKTV.
Completion of the transaction is contingent on regulatory approvals in the Republic of Ireland and Jersey.
“UKTV is a significant opportunity for Scripps Networks Interactive to participate in a thriving multi-channel, dual revenue stream media business in one of the world’s largest television markets,” said Kenneth W. Lowe, chairman, president and chief executive officer of Scripps Networks Interactive. “Making a solid investment in UKTV and entering into a strong partnership with BBC Worldwide reinforces our core international strategy which we believe will create significant long-term value for our shareholders.”
Related to the transaction, Scripps Networks Interactive and BBC Worldwide are negotiating an agreement whereby, after completion, BBC Worldwide would have the option, via a combination of cash and a package of digital rights for UKTV, to increase its shareholding from 50 percent to a maximum of 60 percent. Scripps Networks Interactive’s existing voting rights and Board representation would be unaffected by this proposed arrangement, which would be subject to BBC Executive and BBC Trust approvals.
Formed in 1997, UKTV attracts about 36 million viewers a month across its portfolio of 10 lifestyle, entertainment and non-fiction (factual) programming channels. UKTV brands include Home, Good Food,
Dave, Watch, GOLD, Alibi, Eden, Blighty, Yesterday and Really. UKTV also operates complementary websites for each channel brand.
UKTV channels air award-winning shows from the BBC in addition to original programming. All of the UKTV channels are available on Sky Digital and Virgin Media. Dave and Yesterday also are available on Freeview.
John Smith, chief executive, BBC Worldwide, said: “The launch of UKTV in 1997 created a new secondary platform for content from the BBC and U.K. independents that has delivered great value back to all stakeholders. We thank Virgin Media for the part it has played in developing the business into one of the most successful pay TV companies in the U.K.”
“We welcome Scripps Networks Interactive as our new partner and look forward to working with them to open up further avenues to success. The new agreement we are developing will bring benefits to UKTV’s audiences in the way they can consume content and will help to sustain UKTV’s track record of growth. It will create the opportunity to drive further value from digital rights on behalf of our stakeholders, particularly our shareholder, the BBC.”
Neil Berkett, Virgin Media’s chief executive officer, said: “We are pleased to have reached this agreement with Scripps Networks Interactive. This will allow us to continue to focus on providing a transformative experience for our customers by developing our core strategic strength — the U.K.’s leading digital network — alongside our leading entertainment services.”
About BBC Worldwide Ltd
BBC Worldwide Limited is the main commercial arm and a wholly owned subsidiary of the British Broadcasting Corp. (BBC). The company exists to maximize the value of the BBC’s assets for the benefit of the U.K. licence fee payer and invest in public service programming in return for rights. The company has six core businesses: Channels, Content & Production, Sales & Distribution, Consumer Products, Brands, Consumers & New Ventures and Magazines, with digital ventures incorporated into each business area. In 2010/11, BBC Worldwide generated profits of £160 million on sales of £1158 million and returned £182m to the BBC.
About Virgin Media Inc.
Virgin Media is the first provider of all four broadband TV, mobile phone and home phone services in the U.K. The company delivers ultrafast broadband connections to over half of all U.K. homes, with speeds up to 100Mb, and is expanding this cable network — the result of a multi-billion pound investment — to reach thousands more people across the country. Virgin Media has developed the most advanced interactive television service, bringing together broadcast TV, thousands of hours of on-demand programming and the best of the web in a single set-top box powered by TiVo. The company was the first to offer HDTV and 3D on demand to millions of U.K. households. Virgin Media also operates the most popular virtual mobile network in the U.K. which, when launched, was the world’s first such mobile phone service. It is also one of the largest fixed-line home phone providers in the country.
About Scripps Networks Interactive Inc.
Scripps Networks Interactive is one of the leading developers of lifestyle-oriented content for television and the Internet, where on-air programming is complemented with online video, social media areas and e-commerce components on companion websites and broadband vertical channels. The company’s media
portfolio includes popular U.S. lifestyle television and Internet brands HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and country music network Great American Country.
Forward-looking statements
This press release contains certain forward-looking statements related to the company’s businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The company’s written policy on forward-looking statements can be found on page F-3 of its 2010 Form 10-K filed with the Securities and Exchange Commission.
The company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.
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Contacts:
Scripps Networks Interactive Inc.
Media & Investors
Mark Kroeger, Scripps Networks Interactive Inc., 865-560-5007
mark.kroeger@scrippsnetworks.com
BBC Worldwide
Media
Charlotte Elston, BBC Worldwide +44 (0)208 433 3995
charlotte.elston@bbc.com
Virgin Media Inc.
Media
Michelle Gordon, +44 (0)20 7909 3292
Michelle.gordon@virginmedia.co.uk
Investors
Richard Williams, +44 (0)1256 753037
Richard.williams@virginmedia.co.uk
Vani Bassi, +44 (0)1256 752347
Vani.bassi@virginmedia.co.uk