Two former Virgin Media bosses, who oversaw the $24bn (£16.2bn) sale of the media and telecoms provider to Liberty Global in 2013, think they have a knack for flipping companies. Eamonn O'Hare and Robert Samuelson will float their new investment vehicle, Zegona Communications, on London's Aim market this week.
The pair plan to acquire a struggling European network communications or entertainment company with a sound strategy and an enterprise value of £1bn to £3bn - a bracket that includes the likes of Colt, Telecity and Entertainment One. Zegona will invest in the company and install new management to realise its full value, then sell it and return the proceeds to shareholders. The strategy is reminiscent of Melrose, which buys struggling manufacturing businesses then flips them for a profit.
Management think the rapid growth of data consumption, market consolidation and the bundling of telecoms services are creating lucrative investment opportunities. For example, BT's acquisition of EE could force the telecoms giant to spin off a division to keep competition regulators happy.
Zegona has already raised £30m from big-name investors such as Marwyn, Fidelity and famed fund manager Neil Woodford. That likely reflects its experienced management team: Mr. O'Hare was Tesco's finance chief before he moved to Virgin Media.
