LONDON: British Cable operator NTL Inc. has confirmed that it has made an approach to acquire Virgin Mobile. In this acquisition approach, the company said, it has the support of the Virgin Group's chairman, Richard Branson, who has agreed to sell his 72 per cent stake in the mobile operator to NTL.
NTL has offered Virgin Mobile shareholders 0.09298 NTL shares for each share of Virgin Mobile as well as a cash alternative at 323 pence a share. The whole value of the offer is around 817 million pounds.
Virgin Mobile said it has received the offer and it is considering a response although as is often the case, a rejection of this first offer is expected by Virgin in an attempt to raise the bid price higher.
If and when the acquisition goes through, NTL will be a true player in the information and communication segment with a bouquet of TV, Internet and telephony services. It will be advantageously placed in comparison with rivals BT Group as well as satellite broadcaster BSkyB. The merged entity will be a 4.5 billion-pound communication behemoth with nine million customers.
Analysts feel the deal will have repercussions on the bid for Premier football league broadcasting rights. NTL will now have full potential to be a rival to Rupert Murdoch's BSkyB, which has been the reigning monopoly in the broadcasting scene.
Virgin Mobile, Britain's fifth largest mobile operator, does not have a telecom network of its own, but leases facility from T-Mobile.
While Virgin may seek a better price for its holding in the company, NTL's offer is seen as fair -- a 3.9 per cent premium on Virgin Mobile's closing price Friday.
Posted
on : Mon, 05 Dec 2005 10:25 GMT | Business News
By : Anne Philips
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