Ex-Virgin Media Duo Eye Spanish Cable Deal

A pair of former Virgin Media executives are this weekend on the verge of tying up a €650m (£460m) takeover of one of the leading telecoms groups in northern Spain.

Sky News has learnt that Zegona, an investment vehicle which listed on the London Stock Exchange (Other OTC: LDNXF - news) 's junior market earlier this year, is close to buying Telecable from the private equity firm Carlyle.

Zegona is understood to have been vying to secure a deal with Euskaltel (Madrid: EKT.MC - news) and R, two other Spanish communications groups, with one source saying that it had agreed a purchase with Carlyle on Saturday (Shenzhen: 002291.SZ - news) .

If the deal completes, it will be a significant moment for Zegona, which was set up by Eamonn O'Hare, Virgin Media's former chief financial officer, and Robert Samuelson, who headed the UK company's strategy function prior to its takeover by Liberty Global (NasdaqGS: LBTYA - news) .

Announcing its flotation in March, Mr O'Hare said: "We believe there are a number of attractive opportunities in the European [telecoms, media and technology] market, and with our world-class investors and a team that has an outstanding track record of delivering shareholder value, we’re looking forward to rolling up our sleeves and getting on with the job."

Zegona is expected to pursue other acquisitions over time, employing a 'buy, fix and sell' strategy which has been used successfully by other quoted vehicles such as Melrose (Stuttgart: 2NM3.SG - news) .

The takeover of Telecable will require an equity-raising led by Zegona's founding shareholders, who include Woodford Investment Management, Fidelity, Marwyn and Standard Life (LSE: SL.L - news) .

A statement about the deal could be made to the stock exchange as early as Monday, sources said this weekend.