Virgin snubs mobile float advisers

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The Independent Online

Sir Richard Branson has turned his back on the corporate brokers who floated his Virgin Mobile business in London last summer as he prepares a US listing for his American mobile phone operation.

Sir Richard Branson has turned his back on the corporate brokers who floated his Virgin Mobile business in London last summer as he prepares a US listing for his American mobile phone operation.

Virgin Group has decided the flotation of Virgin Mobile USA, expected to be worth about $2.5bn (£1.3bn) should be led by Merrill Lynch and CSFB.

The float of Virgin Mobile in the UK last July was handled by JP Morgan and Morgan Stanley, but the brokers failed to generate sufficient demand for the shares to justify the initial price range of 235p-285p. Sir Richard was forced to reduce the amount of Virgin Mobile he was planning to sell in the float from 37 to 25 per cent.

Eventually, JP Morgan and Morgan Stanley had to slash the offer price to the bottom of a revised price range of 200p-220p after misjudging investors' intentions.

At the time of the Virgin Mobile float in London, Virgin Group revealed that a float of its US mobile business would proceed in 2005. The operation is a joint venture between Virgin and Sprint, the US telecoms group.

Merrill Lynch and CSFB will lead the float as joint global co-ordinators, joint bookrunners and joint sponsors and underwriters of the offer. JP Morgan may be handed the much more junior role of co-lead manager, but will be given the job of raising new debt of about $700m for the joint venture, as part of a refinancing ahead of a float.

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