LONDON - The board of Virgin Mobile is reportedly going to reject the £834 million bid by UK cable giant NTL after its institutional shareholders felt that the offer was too low.
Sir Richard Branson, who owns a 72 percent stake in the group was reportedly keen for the deal to go ahead, "We'd love to be involved with the creation of something very special, something quite large and something quite exciting," he said at an event in Shanghai. But he added that the decision was not in his hands, "It is not for me to decide. It is up to the company to decide whether the price is fair or not."
NTL has made an offer of 323 pence per share for Virgin and it is understood that the price is too low for Virgin's liking. T-Mobile, another company, which could have been interested in snapping up Virgin has ruled itself out of the race and has commented that it was in a position to veto any possible bid from rival networks.
The takeover could create a combined group with 9 million customers and offer quadruple services based on television, broadband Internet, fixed-line telephony as well as the mobile services. It is reported that Branson would forego his 72 percent stake in Virgin in exchange for a 14 percent stake in the combined group. This would make him the single largest shareholder in the company.
Any such merger would pose a direct challenge to James Murdoch's BSkyB and the immediate flare-up could occur when the football telecast rights are auctioned off next year.
NTL itself is in the midst of a merger with rival Telewest and any possible moves for Virgin would mean that it would be at least two to three years before any benefits showed up. However, Branson is very determined to press forward with the deal and is only waiting for a formal nod from other shareholders.
Posted
on : Tue, 06 Dec 2005 20:45 GMT | Business News
By : Mark Richardson
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