NTL offers £917m for Virgin Mobile

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The Independent Online

The UK cable group NTL confirmed last night that it had tabled an improved £917m offer for Virgin Mobile after the company's majority shareholder, Sir Richard Branson, agreed to accept less for his shares than other investors.

Sir Richard's Virgin Group would receive 349p a share in a mix of cash and NTL redeemable stock for its 71.3 per cent stake if the deal goes through, while minority shareholders in Virgin Mobile are being offered 372p for their shares.

The offer represents a 10 per cent improvement on the 323p approach NTL made in December, although for minority shareholders it is worth 15 per cent more.

NTL will now begin due diligence on Virgin Mobile with a view to submitting a formal offer for the company within the next fortnight that can be recommended by its board of directors.

The outcome of the takeover may depend on the position of Virgin Mobile's two biggest minority shareholders - Fidelity and Morley Fund Management - both of which own about 7 per cent of the company. Fidelity is considering whether to ask the Takeover Panel to examine whether the offer could unfairly disadvantage minority shareholders because of the licensing income Virgin Group will receive from NTL if the deal goes through, which makes the transaction more valuable to Sir Richard than to other shareholders.

However, sources close to the negotiations pointed out that Virgin Group already received a royalty from Virgin Mobile for use of the name, and this would remain the case whoever owned the company in future.

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