Virgin Media tries to head off rebellion

The board of Virgin Media met last night to discuss growing shareholder unrest over the firm's strategy and performance after calls for a meeting with management from one of its more aggressive investors.

The board meeting came after the company's annual meeting, at which one of two directors connected with the US hedge-fund manager and one-time major shareholder in NTL Bill Huff stood down. The fact that Mr Huff, who played a big part in bringing NTL together with Telewest, had two former colleagues as well as his own seat on the Virgin Media board despite holding only a 5.7% stake, had reportedly been a contentious issue for other shareholders.

William Connors stood down yesterday - as he had said he would in the firm's SEC filing last month - leaving Edwin Banks as the only person on the board who used to work at WR Huff Asset Management.

Investors have become increasingly concerned about the strategy and performance of Virgin Media, in which Sir Richard Branson's empire is the largest shareholder with a 10.5% stake.

In a filing with the US markets regulator made late last week, Franklin Mutual Advisers, which has a 9.4% stake, said that in view of the results for the first quarter it wanted discussions with Virgin about its "strategic direction, corporate governance and management".

Last week the company admitted it lost 47,000 customers in the first three months of the year. In the same period Sky added 51,000 customers.

"There are a lot of frustrated shareholders," one investor said before yesterday's annual meeting. "This all comes in the face of last year when on at least two occasions there were rumours of private equity interest in the company at stock prices in excess of $30 a share and we are well below that now."