Hold the champagne
August 7th, 2007, filed by Megan Davies
As the summer rolls on, deals continue to be pulled or delayed.
Tuesday’s announcements included British cable operator Virgin Media,which postponed the sale of its company after it became apparent buyers would not have access to the debt needed to do a deal right away.
In the mortgage sector, where the problems in the subprime market knocked the debt markets in the first place, U.S. mortgage insurer MGIC Investment Corp said its management viewed it not obligated to complete its pending merger with Radian Group Inc. The pair are the two biggest investors in C-BASS, which issues and invests in home loans to less credit-worthy borrowers and is facing a liquidity crisis.
Elsewhere, there are questions about U.S. student lender Sallie Mae. Despite the lender saying Monday its $25 billion deal to be bought by a group of private equity groups and banks should be consummated in October, a source close to the buyout group maintained that closing conditions may not be met.
In addition, apartment landlord Archstone-Smith said on Monday that it expected the closing date of its purchase to be pushed back to the fourth quarter.
Along with Virgin Media, other British deals on ice are Britain’s Cadbury’s sale of its North American soft drinks business and Mitchells & Butler’s plans to spin off its property unit.
Virgin Media, whose biggest shareholder is entrepreneur Richard Branson (above), had asked suitors to submit expressions of interest by the first week of August to kick off an auction of the company, people familiar with the situation told Reuters. But it said Tuesday that its financial advisers — Goldman Sachs and UBS — recommended the strategic review process be extended until potential strategic partners or bidders “can complete their proposals in a more stable debt market environment”.
