(Bloomberg) -- Virgin Media O2, the owner of UK’s second-largest fixed network, is seeking outside investors to help fund its £5 billion ($6.6 billion) newly created network company to challenge incumbent BT Group Plc, people with knowledge of the matter said.
VMO2 is working with advisers to raise at least £1 billion by selling a minority stake in the new venture, whose valuation could be more than £5 billion, said the people, who asked not to be identified as the information is private.
The potential stake sale, which could range from 20% to 40%, could kick off as soon as October, some of the people said. The company, jointly owned by Liberty Global and Telefonica SA, is targeting infrastructure, private equity, pension and sovereign wealth funds.
Deliberations are ongoing and details such as timing and fundraising size could change, the people said. Representatives for Liberty Global and Telefonica declined to comment.
The operator announced in February plans to spin out its cable and fiber network, which serves 16 million homes, into a wholly owned new network company. The new netco “creates a distinct, focused fixed wholesale challenger at scale” to better compete with market leader BT Openreach, it said at the time.
--With assistance from Jillian Deutsch.
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