Letter: Virgin's price

Kenneth Hibbett
Wednesday 13 January 1999 19:02 EST
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Sir: I feel compelled to correct the impression that you gave in your two articles on Virgin Radio (12 January).

Perhaps uniquely among the major British radio stations the management (as opposed to the shareholders) of Virgin Radio has remained unchanged over the last five years.

On 6 May 1997 Virgin and Capital announced that they had entered into an agreement to sell Virgin Radio for pounds 85m. Virgin did not sell its radio station for a materially different consideration to Ginger. Even after a deduction for Virgin's investment in Ginger, the cash proceeds from the transaction were well in excess of pounds 50m, and not pounds 16m as you have suggested.

There was no need for an amazing "turn-around" to reach the announced profits in October because the company had been generating operating profits for the two prior years. Richard Branson and Virgin Interests had never consequently needed to invest over pounds 10m.

KENNETH IBBETT

Chief Executive

Virgin Media Group

London W1

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