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NTL poised for Virgin takeover
(The Mail on Sunday Via Thomson Dialog NewsEdge)NTL is set to launch its longawaited GBP961 million takeover of Richard Branson's Virgin Mobile Group this week.
Virgin shareholders will be offered cash at 372p a share with an alternative offer of shares in the cable television giant, currently worth the equivalent of 352p.
Shares in Virgin Mobile closed last week at 377p.
As revealed by Financial Mail, Branson will swap his 71 per cent stake in Virgin Mobile for equity in NTL at a lower price than that offered to other shareholders, as well as GBP125 million in cash.
Branson will end up with about 13 to 14 per cent of NTL, which has just concluded another merger with smaller UK cable rival Telewest.
He will be the largest shareholder in the combined company, which is expected to be rebranded to include the Virgin name.
Virgin Mobile's board will recommend the NTL offer to shareholders. Most are expected to take cash, but rumours of a possible bid for NTL could tempt some institutional investors to take the Nasdaqlisted shares.
The deal has been the subject of endless speculation since details of talks between Branson and NTL were leaked before Christmas.
As part of the deal, Branson's group will receive a marketing service fee for the use of the Virgin brand name. This will amount to 0.25 per cent of NTL's annual turnover.
The deal has taken a tortuously long time to emerge and last week some bankers were still willing to lay odds that the wait might not be over this week.
'Some people were saying that the deal was ready in February,' said one.
'How wrong they were.
'No one involved in negotiating this will breathe until the deal is completed, never mind the offer.' The merged company will span cable TV, fixed line and mobile telephony as well as being a supplier of broadband internet.
The mobile business will initially be run separately, and executives from the Virgin business, including chief executive Tom Alexander, are all likely to be offered roles.
The deal will not affect Virgin's other mobile businesses in America or a new venture to be launched in France this week alongside The Carphone Warehouse.
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