The operator issued a statement early Tuesday, following speculation in the Financial Times that a deal was in the works, noting that it is "in discussions with Liberty Global, Inc., a leading international cable company, concerning a possible transaction. Any such transaction would be subject to regulatory and other conditions. A further announcement will be made in due course."

The news sent Virgin Media's share price rocketing by almost 15 percent on the London Stock Exchange to £28.30, giving the operator a market capitalization of £7.6 billion ($12 billion). The operator also has about £5.7 billion ($9 billion) in debt on its balance sheet, giving it an "enterprise value" of about $21 billion.

The move would add another major business to Liberty's European empire, which already includes operations in 11 countries from Ireland in the west to Romania in the east. But it would put a further strain on its finances: The company ended Sept. 2012 with total debt of $26.5 billion and cash and cash equivalents of $3.3 billion.

Virgin Media generates revenues of about £1 billion ($1.58 billion) per quarter from its 4.85 million cable and 1.67 million mobile customers. In the third quarter of 2012, it reported revenues of £1.03 billion ($1.62 billion) and an operating profit of £180 million ($284 million). The U.K. operator is due to announce its fourth-quarter and full-year results for 2012 early Wednesday morning.

Liberty Global, which generated revenues in Europe of about $2.15 billion in the third quarter of 2012, recently expanded its European business by acquiring a controlling interest in Belgium's Telenet. (See Liberty Global Bids $2.5B for Telenet.)

— Ray Le Maistre, International Managing Editor, Light Reading