BSkyB eyes £600m offer for Virgin's cable channels

BSkyB is considering a £600m bid for Virgin Media's cable channels, which include Bravo, Living and Challenge, according to City sources. The satellite operator would also buy the Virgin channels that broadcast under the UKTV banner, including Gold, History and Drama. Investment bank Goldman Sachs is advising Virgin on a sale and a decision is said to be not far off.

It is understood that BSkyB, controlled by Rupert Murdoch's News Corporation, wants all the channels, which means Virgin Media would have to buy BBC's 50 per cent share of the UKTV content business. Its programmes include Spooks, Planet Earth and Casualty

Whether the BBC can be persuaded to part with its stake remains to be seen. Last month, there were reports that the corporation was looking to buy Virgin Media's share of UKTV, but was struggling to find private equity support.

Virgin Media, in which Richard Branson holds a £240m stake, said in February that year-on-year losses increased from £88m to £163m, as a result of higher interest charges. Virgin Media's new chief executive, Neil Berkett, who took over from Steve Burch, said the company was concentrating on improving its broadband offering and reducing 'churn' - the number of customers leaving.

Early in 2007, the cable company lost many customers after Sky blocked Virgin Media from accessing its channels in a row over charges. The Branson-sponsored company has received takeover approaches from a number of private equity firms, including Providence and KKR.