Newspaper article The Evening Standard (London, England)

Branson Backs NTL's Bid for Virgin Mobile; City Briefing

Newspaper article The Evening Standard (London, England)

Branson Backs NTL's Bid for Virgin Mobile; City Briefing

Article excerpt


SHARES in Virgin Mobile jumped 31p to 342p today, as it confirmed a takeover approach from cable giant NTL, a move that could create a major competitor to Rupert Murdoch's BSkyB.

Dealers hope the move could trigger an auction for the last remaining independent UK mobile company other than Vodafone.

Sky shares dropped 121/2p on fears of increased competition.

Though NTL's [pounds sterling]835 million bid has the backing of 72% shareholder Sir Richard Branson, the mobile company's board insists it will be "mindful of its duty to maximise value for all shareholders".

So NTL's 323p-a-share cash or share offer now sets a clear marker for any rival bidders.

NTL chief executive Simon Duffy first mooted a merger with Branson months ago, but a formal bid is not expected until the New Year as many details are still to be thrashed out.

Virgin Mobile's minority shareholders - including Fidelity, Aberforth Partners and asset managers Morley and Deutsche - may well try to push the bid terms higher.

NTL, in the throes of merging with rival Telewest, said today it would BY NICK GOODWAY Business Reporter offer 323p cash or 0.9298 of its own shares for every Virgin Mobile share.

Branson said he is likely to take the majority of his stake in shares, but reserves the right to take a small portion of his consideration in cash.

"We'd love to be involved with the creation of something very special, something quite large and something quite exciting," he said.

Between them, NTL, Telewest and Virgin Mobile would have around nine million customers. That compares with Sky's target of 10 million subscribers by 2010.

NTL has used Virgin branding for its internet and broadband offerings for the last nine years.

If the deal goes through, the new entity is certain to be branded Virgin.

Though it will be led by Duffy, roles are expected to be made for Virgin Mobile chief executive Tom Alexander and other directors.

It is not thought Branson would take a major role in running the merged company, although with a 14% stake he will be its largest shareholder. …

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