Newspaper article The Evening Standard (London, England)

CITY BRIEFING; Branson Picks Up [Pounds Sterling]700m from Sale of Virgin Mobile

Newspaper article The Evening Standard (London, England)

CITY BRIEFING; Branson Picks Up [Pounds Sterling]700m from Sale of Virgin Mobile

Article excerpt

Byline: NICK GOODWAY

SIR Richard Branson enjoyed one of his biggest-ever payouts today as he agreed to sell Virgin Mobile, the phone company he set up just seven years ago, to cable giant NTL for more than [pounds sterling]1 billion.

Branson will collect almost [pounds sterling]700 million in NTL shares and cash for the firm he floated on the stock market less than two years ago. He could also pick up at least [pounds sterling]255 million from the deal because he has licensed the Virgin brand to be used by NTL for a guaranteed minimum payment of [pounds sterling]8.5 million a year for the next 30 years.

Virgin Mobile's trendy image and concentration on pay-as-you-go low-price tariffs has attracted more than five million customers.

By far the most successful virtual operator in the UK, it owns no masts or cables and routes its calls over T-Mobile's network.

Branson is likely to receive just over [pounds sterling]120 million in cash and about [pounds sterling]570 million in shares. The deal will also make several Virgin Mobile executives, led by chief executive Tom Alexander into multimillionaires.

It is structured so that Branson's Virgin Group ends up with a 10.7% stake in NTL, which plans to use his brand and his marketing expertise as its offers 9.5 million UK customers the four-way choice of television, broadband, fixed and mobile telephony.

NTL chairman James Mooney said: "Central to today's announcement is our strong belief that offering a quad-play underpins true media convergence, and offering high-quality communications will appeal to existing subscribers of the enlarged business as well as new customers. It is a truly step change not just for NTL but for the media sector as a whole in the UK."

Virgin Mobile shareholders have been given three options. Only Branson, with a 72% stake, is expected to take the third and cheapest option, which is worth 311p a share.

Other backers can choose between a straight cash offer worth 372p a share and an all-share swap worth 389p a share. …

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