NTL’s plans to create a ‘quadruple play’ business with the acquisition of Virgin Mobile have hit a stumbling block, as Virgin’s board rejected an £817 million bid, despite the deal having majority shareholder Sir Richard Branson’s backing.
Virgin’s board opposed NTL’s offer, claiming that it undervalued the business, although press speculation this morning suggests that the company may be hoping for a higher offer in order to continue with the deal. Richard Branson was reportedly “90% sure a deal could be struck” this morning.
The deal, clearly designed to put pressure on multi-channel heavyweight BSkyB, was unveiled earlier this week, with NTL offering Virgin Mobile shareholders 0.09298 shares in NTL for each Virgin share held, with a cash alternative of 323 pence per share.
The suggested deal was subject to NTL completing its £3.4 billion merger with cable rival Telewest, and would create a cross-platform media giant, with 2.5 million broadband customers, 4.3 million fixed-line telephone accounts, more than 5 million mobile phone customers providing revenues in excess of 4 billion.
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