Less than a month after Virgin Media announced that it was putting its plans to sell the company on hold, its CEO Steve Burch abruptly resigned.
Burch’s resignation is effective immediately according to a Virgin Media press release, which cited personal and family reasons for the departure. Burch will also resign from Virgin’s board of directors.
Virgin Media, formerly NTL Inc., is the largest cable operator in the United Kingdom with about 3.4 million video customers.
Burch was a 17-year veteran of Comcast – most recently serving as president of its Atlantic division – before he joined Virgin in January 2006.
News of his abrupt departure sent Virgin shares down about 54 cents each to $22.25 per share in early trading Tuesday. However, the stock appeared to rebound later in the day, trading at $22.77 (down 2 cents each) at 1:04 p.m.
Virgin has been on the block since it received an unsolicited offer of about $23 billion (11.5 billion pounds) in July from private equity giant The Carlyle Group.
Other private equity firms, like Providence Equity Partners, and strategic players like Comcast and Liberty media have also shown interest in the company, according to several published reports. While the company has said that it is exploring strategic alternatives, including a sale, it said in a statement on Aug. 7 that it was putting that review on hold in light of the downturn in the credit markets.
Virgin said in a statement that Burch will be replaced in the interim by chief operating officer Neil Burkett. The company said that the search for a permanent replacement for Burch will begin shortly.
“Steve has contributed significantly to the transformation of Virgin Media,” Virgin chairman James Mooney said in a statement. “Since he joined us, the company has emerged as the UK’s only ‘quad play’ provider and a genuinely distinctive presence in the world of communications and entertainment. On behalf of Virgin Media’s board of directors, I thank him for his contribution to our development and wish him every success for the future.”
In a research report, Oppenheimer & Co. analyst Tom Eagan wrote that while Burch’s departure is a blow, he said it should have no impact on the company eventually being sold to a private equity player.
Eagan also was optimistic that the turnaround in fundamentals at the company is on track and expects that Virgin’s roll-out of new services and re-pricing of existing bundles should improve customer growth in the third and fourth quarters.
“Although true that Mr. Burch's departure comes at a particularly unfortunate time for [Virgin] given their heightened battle for market share and their quest for merger synergies), we believe that interim CEO Neil Berkett will be able to execute plans already in place,” Eagan wrote.