Virgin Mobile Rejects NTL Takeover Bid
LONDON -(Dow Jones)- Virgin Mobile Holdings (U.K.) PLC said Wednesday that its board had unanimously rejected the proposed takeover offer by NTL Inc.
In a statement, it said, "The Board has concluded that the potential offer materially undervalues Virgin Mobile."
NTL, which operates cable TV system in the U.K., said Monday it was considering offering 323 pence a share for Virgin Mobile, which would value the U.K.-based mobile operator at GBP834 million.
Virgin Mobile's rejection is in line with hints in Monday's announcement of a possible bid which implied that 323 pence a share may not be enough.
Virgin Mobile's statement said that the board representative of Richard Branson's Virgin Group absented himself from the discussions.
Virgin Group has a 72% holding in Virgin Mobile and had pledged that if an offer was made it intended to take payment in the form of NTL shares and could license its brand so that NTL would offer a wide range of Virgin-branded services.
Virgin Mobile's share price has stayed above the 323 pence level since the bid was announced. The shares closed Wednesday unchanged at 345.5 pence.
Analysts say that NTL's bid is motivated by a desire to offer so-called "quadruple-play" services, adding mobile phones to NTL's existing portfolio of TV, Internet and fixed-line phones.
However, there have been doubts about whether this would be compelling to consumers and about whether NTL, which is already buying rival U.K. cable company Telewest Global for GBP3.4 billion, can integrate two large purchases at once.
-By Gren Manuel, Dow Jones Newswires; 44 20 7842 9279; gren.manuel@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 7th December 2005
