Virgin Media O2 (VMO2) is considering tabling a takeover bid for the alternative broadband provider Cityfibre.
The Daily Telegraph reports initial talks have taken place between Mike Fries of Virgin’s parent company Liberty Global, and Cityfibre boss Greg Mesch. Any transaction could take place through Liberty, its full-fibre joint venture Nexfibre or a new separate entity, or VMO2 itself.
The loss-making Cityfibre is the largest of the so-called alternative providers operating in the UK. VMO2 has been working with the US-based LionTree to explore potential deals in the alterative sector.
Last week, it emerged talks between VMO2 and the established TalkTalk network over a possible tie-up had broken up without an agreement.
One estimate is that Cityfibre, which overlaps Virgin’s coverage area by roughly 50%, could command in the region of three billion.
As the largest of the alternative providers Cityfibre is aiming to reach 8 million UK homes by 2025. An announcement on the expansion of its footprint is expected later this week.