NTL piles the pressure on Branson over bid terms

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The Independent Online

The cable television company NTL yesterday told Sir Richard Branson that it was up to him to coax Virgin Mobile's minority shareholders into accepting its £834m bid.

NTL reckoned that Sir Richard, who would net £10m a year in royalties from a takeover, should even dig into his own pocket to keep them happy.

The board of the mobile operator, led by its chairman Charles Gurassa, unanimously snubbed NTL's offer this week as too mean. However NTL said yesterday it thought its 323p-a-share offer fair, that it is the only one on the table, and that it has a right to reduce it.

Institutional investors - including Fidelity, Morley and Aberforth - are not against the deal in principle, but want a higher price.

They control 28 per cent of Virgin Mobile. Sir Richard's privately owned Virgin empire owns the rest.

Sir Richard has signalled his desire for the deal to proceed, but has left negotiations up to Virgin Mobile's independent board.

Sir Richard threw the bidding process into disarray this week with unguarded comments during an interview on the BBC's Radio Five Live.

His suggestion that a deal could be struck should NTL increase its offer by £100m prompted a hasty statement from Virgin Mobile to confirm that it had not solicited a higher offer.

Yesterday's announcement was seen as the latest move in a game of brinkmanship between Mr Gurassa and NTL.

Should Mr Gurassa prove too aggressive, Sir Richard could step in to force through the offer. That would drive a wedge between him and Virgin Mobile's minority shareholders.

Mr Gurassa has been here before. He held out for £1.8bn when selling Thomson Travel in 2000.

Shares in Virgin Mobile were unchanged last night at 355p.