Virgin Media 2012 Annual Report Download - page 6

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stock, other than a quarterly dividend of up to $0.04 per share, incur or otherwise become liable for material
indebtedness, enter into certain transactions with related parties or enter into new material contracts, in each case,
other than in the ordinary course of business, pursuant to certain exceptions and baskets set forth in the Merger
Agreement or unless Liberty Global consents in writing to the taking of any such action. If we fail to comply with these
restrictions in all material respects, unless waived by Liberty Global, the Merger Agreement could be terminated or
the merger not consummated.
The consummation of the merger is subject to regulatory approval, the affirmative approval of our shareholders and
those of Liberty Global, and other customary closing conditions. In addition, the Merger Agreement will terminate if,
prior to the consummation of the merger, we enter into an acquisition agreement with respect to a superior proposal
and pay an applicable termination fee of up to $470 million, or if the merger is not consummated on or prior to October
5, 2013, which is the eight month anniversary of the date of signature of the Merger Agreement, or January 5, 2014 if
extended for certain reasons to the eleven month anniversary. The Merger Agreement also includes certain other
events of termination and certain other termination fee and expense provisions.
At the effective time of the Merger, pursuant to the Merger Agreement, each share of our common stock issued and
outstanding immediately prior to the effective time (excluding shares held by ourselves or our subsidiaries in treasury
and dissenting shares in accordance with Delaware law) will be converted into the right to receive (i) 0.2582 Series A
shares of the Ultimate Parent, (ii) 0.1928 Series C shares of the Ultimate Parent and (iii) $17.50 per share in cash.
Based on our fully-diluted shares outstanding of 335 million as of December 31, 2012, we expect that our shareholders
will own approximately 36% of the shares outstanding of the Ultimate Parent and have approximately 26% of the voting
rights.
The aggregate cash portion of the merger consideration is expected to be $6.1 billion, $2.7 billion of which Liberty
Global will finance from its own cash reserves and $3.4 billion of which Liberty Global will raise as bank debt and in
the capital markets, which, if the merger is consummated, will, together with debt raised to replace certain of our
existing facilities, be assumed by us and result in an increase to our overall level of debt.
Financing implications of the Merger on our existing debt
Consummation of the merger would represent a change of control event under the terms of the relevant indentures
of all of the senior secured notes and senior notes issued by our wholly owned subsidiaries Virgin Media Secured
Finance PLC, or VMSF, and Virgin Media Finance PLC, or VMF, and obligate us to offer the noteholders the right to
put their notes back to us at 101% of the principal amount plus accrued interest. At the request of Liberty Global in
order to facilitate the financing by Liberty Global of the merger, on February 6, 2013, VMSF and VMF commenced
consent solicitations in respect of some of these notes for the noteholders to preemptively waive this obligation and
to seek consents to effect certain other proposed amendments in relation to the Transactions.
We have not solicited consents in relation to our 5.25% Senior Notes due 2022, our 4.875% Senior Notes due 2022
and our 5.125% Senior Notes due 2022 and will be required to repurchase these Notes within 30 days of the
consummation of the Merger.
Upon consummation of the merger our convertible notes will have the right to convert and receive the same consideration
that is received in the merger as the holders of Common Stock. The convertible holders will also be offered the right
to put their notes to the company at 100% of the principal amount plus accrued interest.
KEY DEVELOPMENTS IN 2012
Superfast Broadband
We expect the growth in the market for faster broadband services to continue, with customers demanding more content
at a higher quality, spending longer online and connecting multiple devices concurrently within the household. In
January 2012, we announced an 18-month program to double the broadband speeds of over four million customers,
with approximately 76% of our Network having been upgraded at December 31, 2012.
In August 2012 the U.K. Office of Communications, or Ofcom, re-confirmed that we have the fastest average broadband
download speeds widely available to customers in the U.K.
At December 31, 2012 we had 2.2 million customers, or 51% of our broadband base, taking superfast broadband,
which we define as a broadband download speed of 30Mbit/s or higher.
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