Branson on the back foot

4 April 2006 By Mike Verdin

The UK cable company has launched its formal £1bn bid for the UK mobile operator. But it isn t done and dusted yet. Virgin minorities must vote to licence the Virgin brand to NTL. That gives them a chance to press for better terms from Sir Richard Branson.

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Virgin Mobile, the UK mobile operator, agreed a £960m bid by NTL, the cable company.

NTL is offering 372p in cash or 0.23245 of its shares for every Virgin Mobile share. At NTL's closing price on April 3, the share swap values Virgin Mobile shares at 389p.

As a third option, Virgin Mobile shareholders can take 0.18596 NTL shares and 67p in cash, valuing their shares at 378p apiece. Sir Richard Branson has undertaken to tender his 72% stake in Virgin Mobile to the cash and shares option.

The deal is conditional on Virgin Mobile's minority shareholders allowing NTL to adopt the Virgin brand. Approval requires a simple majority of votes cast in a poll of the minorities.

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