Bird in the hand

10 January 2006

The company is said to be in talks with NTL about a bid at 400p in cash. But the deal is complex and uncertain. Virgin s shares are 71% above the IPO price and 16% above the prebid level. No wonder investors are taking cash off the table.

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Merrill Lynch placed 9.3m shares in Virgin Mobile – equivalent to 3.6% of the company.

The shares were placed with investors at a price of 362p – a 5% discount to the closing price on January 9. The seller is understood to be an institutional investor.

Virgin Mobile is 68% owned by Richard Branson's Virgin Group. The shares sold represented 11% of the free float.

The sale comes as Virgin Mobile is in talks with NTL Group about an offer for the company. On December 5, NTL announced a "potential offer" to acquire the company at a price of 323p per share in shares or cash .

Press reports at the weekend suggested that an offer of 400p in cash might be forthcoming for the minority investors.

Virgin Mobile's largest institutional shareholders are Fidelity and Morley Fund Management – both with holdings of about 6.6%.

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