Virgin Media Inc. Chief Executive Officer Neil Berkett, who is overseeing his company’s takeover by Liberty Global Inc., will walk away with $86.8 million when he leaves his post once the deal is completed.
Berkett will receive $19.6 million from cash and stock in severance pay, according to a regulatory filing by Liberty Global yesterday. Other options and rewards from Berkett’s long-term incentive plan amount to $67.2 million, according to Lulu Bridges, a Virgin Media spokeswoman.
The native New Zealander and former banker, who has served as Virgin Media’s chief since 2008, announced he would leave the role shortly after Liberty Global agreed to buy the U.K. cable TV provider. A search for his successor is already under way. Under Berkett, Virgin Media’s stock has tripled.
Liberty Global, controlled by billionaire John Malone, is paying $16 billion for Virgin Media to expand in Europe’s biggest cable-TV market. The company competes against larger rival British Sky Broadcasting Group Plc, as well as streaming services such as Netflix Inc.
Virgin Media shares rose 1.2 percent to 3,178 pence in London. The company is valued at 8.6 billion pounds ($12.8 billion).
Malone serves as Liberty Global’s chairman and held approximately 36 percent of the company’s voting power as of Dec. 31, 2012, according to the filing.
A merger of Liberty Global and Virgin Media was first discussed during a “social evening” in August among Virgin Media Chairman James Mooney, Liberty Global CEO Mike Fries and Aryeh Bourkoff, the head of LionTree Advisors LLC, according to the filing. Fries praised Virgin Media’s turnaround since emerging from bankruptcy in 2003 and discussed whether a combination of the two companies made sense.
A few days later, Virgin Media directors determined the company wasn’t for sale, though they agreed to consider a proposal from Liberty Global “only if it embodied a compelling valuation,” according to the filing.
The papers show Virgin Media rejected several proposals and calls for discussion with Liberty Global. The two sides finally entered into a confidentiality agreement just before Christmas.
It was also noted that Berkett previously informed Virgin Media’s board he intended to leave his CEO post by Dec. 31, before agreeing to the Liberty Global transaction, and that a search for his successor had started.
Liberty Global cited both companies’ expertise across digital TV, broadband and telephony as a key reason for combining, as well as the opportunity to expand Liberty Global’s global footprint.
Berkett said this week he was doubtful whether he’d take on another executive role after stepping down, and that he wasn’t committed to finding another job in the media industry.
“I haven’t thought much ahead about what I’d like to do,” he said in an interview during the Cable Congress in London. “Seven and a half years at Virgin Media is a big chunk out of anyone’s time and I’ve spent a big chunk of that as CEO.”