NTL (NTLI) has traded up steadily this week, extending its gains since it announced it was going to purchase Virgin Mobile. The Virgin deal is still being negotiated and I expect it to be completed, however, this week’s gains are due to more rumblings that private equity funds are interested in buying NTL after it completes or receives approval to complete its merger with Telewest (TLWT) in 1Q06 and news on a management change at the CEO level of the new company….

The Sunday Times in London reported last weekend that private equity was still interested, liked the Virgin deal, and did not feel the incremental $1.5 billion that would need to be raised was a problem. The article also noted that it was not clear how Richard Branson, who stands to own 14% of the new NTL upon closing of the Virgin and TLWT mergers, would react to private equity overtures. Pricing was not discussed but the same $10 billion figure was mentioned. As outlined previously, this must represent market cap of the new firm as debt alone will be over $8 billion. The Virgin deal will add to the current pro forma 110 million shares outstanding but I still think a private equity deal could be completed anywhere from $80 to $100 per share. I continue to view the interest of private equity as confirming the value I see at new NTLI due to the large free cash flow generation even in a minimal revenue growth environment. Cost saves alone, outlined and affirmed at last week