Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) has made a $23 billion offer for Virgin Media Inc. (NASDAQ:VMED), according to reports today. The deal will see shareholders of Virgin Media take 36% of the new group, and take $6 billion in cash. That cash will be extracted from Virgin Media itself, in a complicated financing arrangement. The news came on the back of Virgin Media’s earnings report.

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This is the second largest acquisition deal that has been announced at Leibery Media in the new year. The company’s long running battle to take control at Sirius XM Radio Inc (NASDAQ:SIRI) surged forward at the beginning of January when FCC approval was given to the deal.

The FCC said that the move would not hurt the public’s interests, or adversely affect competition. In order to complete the deal, Liberty Media will refinance the debt currently held by Virgin, and add $7.9 billion in new debt. A huge portion of that debt, $3 billion, will be used to complete the purchase of Virgin. Virgin will be a separate entity on some grounds after the deal closes.

The company will, for example, hold its debt separate from the group.The deal is still subject to shareholder and regulatory approval, and there is the possibility of dissent on either of those fronts. Shares in Virgin Media Inc. (NASDAQ:VMED) fell by close to 2 percent after the deal, and earnings, were announced today. Since the start of the year, however, shares have increased by 22 percent in anticipation of the deal.

Shares in Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) also fell on the market after the announcement of this news. The company’s A class shares shed almost 3 percent of their value, while B class shares lost more than 5 percent. Since the start of the year those shares have gained 4.6 percent and 2 pecent respectively.

A New York Times article on the possible acquisition, questions the amount of debt that Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) would need to acquire to complete the acquisition. The piece asserts that the deal has all of the hallmarks of the pre-crisis boom and could be considered a dangerous move.

About half of the new Virgin Media Inc. (NASDAQ:VMED) debt will be financed by the issuance of high yield bonds, while the outstanding amount is expected to come in the form of a loan.  Virgin dividends will be shipped to its parent, and that money will be used, in part, to pay for buy backs from Liberty shareholders.

The deal is complex, and it is planned to saddle the companies involved with a huge amount of new debt, shareholders are clearly worried about the particulars and the regulatory risks inherent in any large merger, particularly an extremely complicated one.

A Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) report on the deal set shares in Virgin Media Inc. (NASDAQ:VMED) down from buy to hold after the huge rise in the shares in recent months, and the addition of regulatory and shareholder dissent risks to the company’s downside. The deal will now head toward those risks, and if it surpasses them, and Liberty Global Inc. (NASDAQ:LBTYA) (NASDAQ:LBTYB) is able to secure financing, the deal is hoped to be completed later in 2013.