Branson could have done NTL deal without minority support

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The Independent Online

Sir Richard Branson was prepared to force through NTL's £917m takeover of Virgin Mobile against the wishes of its minority shareholders if necessary, it has emerged.

The formal recommended offer for Virgin Mobile from the UK cable operator, expected to be announced this week, will be achieved through a scheme of arrangement which requires only 75 per cent shareholder support.

This means that Sir Richard's Virgin Group, which owns 73.2 per cent of Virgin Mobile, would have been able to push through the deal even if minority shareholders had refused to accept the improved terms on offer from NTL.

Under the revised terms of the deal, Sir Richard will accept 349p a share for his majority holding in Virgin Mobile while minority shareholders will get 372p a share for their 22.8 per cent stake. The offer values Virgin Mobile at £917m and represents a 15 per cent improvement on the 323p NTL originally offered minority shareholders when it first bid last December.

Sir Richard will accept mainly NTL shares for his Virgin Mobile stake, making him the biggest single shareholder in the new merged company with a stake of about 12 per cent.

The merged company will become the first in the UK to offer the so-called "quadruple play" of television, broadband internet, fixed and mobile telephony. It will have a total of 9 million customers and will trade under the Virgin brand, posing a serious competitive threat to Rupert Murdoch's BSkyB.

Some analysts have expressed surprise at the amount NTL is paying and scepticism about the extent to which it will be able to sell its cable package to Virgin Mobile's young subscribers, who are overwhelmingly on pre-pay deals.

The takeover will make Virgin Mobile the latest UK company to fall victim to a foreign bidder. The rival mobile operator O2 has already been swallowed by Spain's Telefonica, while P&O and BPB have succumbed to overseas bids and BOC and BAA are also being stalked by foreign suitors.

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