[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 4 April 2006, 15:11 GMT 16:11 UK
Virgin Mobile to be bought by NTL
Family watching NTL cable TV service
NTL and Virgin Group have agreed the conditions of a deal
NTL has reached agreement with Virgin Mobile over the terms of a takeover offer, which values the mobile operator at 962.4m ($1.62bn).

The deal will create the first UK firm to provide a four-way offer of cable TV, internet access, fixed line telephony and mobile phone services.

The combined group will be branded under the Virgin name.

The new firm hopes to able to challenge BSkyB, the UK's dominant pay-TV firm, and challenge major telecoms operators.

The independent directors of Virgin Mobile intend to recommend NTL's offer to shareholders
Charles Gurassa, Virgin Mobile chairman

"It is truly a step-change transaction not only for NTL but for the media sector as a whole in the UK," said James Mooney, executive chairman of NTL.

Deal options

Virgin Mobile is 71%-owned by Sir Richard Branson's Virgin Group. But NTL's original 871m bid was rejected by Virgin Mobile's independent board members.

Under the new offer from NTL, owners of Virgin Mobile shares will be offered 372p cash per share, or NTL shares, or a mixture of both.

Sir Richard's Virgin Group is to accept the third option - of shares and cash - which will see it become the largest shareholder in the new entity.

"After careful consideration, the independent directors of Virgin Mobile intend to recommend NTL's offer to shareholders," said Charles Gurassa, chairman of Virgin Mobile.

The NTL cash offer represents a 19.6% premium to the price of Virgin Mobile shares on the day before news of the takeover interest was made known, on 2 December 2005.

NTL - which only recently completed its merger with smaller cable firm Telewest - has also agreed an exclusive 30-year licence for the Virgin brand and believes this will help attract and retain customers.

It will have to pay 0.25% royalties on its revenue for three decades - with a minimum annual payment of 8.5m - to Virgin Enterprises for the use of the brand name created by Sir Richard.

NTL has also persuaded Virgin Mobile management to stay on and run the business, which will continue to be based in the UK.

Hear more about the digital services which will be offered

NTL ups offer for Virgin Mobile
16 Jan 06 |  Business
Virgin Mobile rejects NTL offer
08 Dec 05 |  Business
NTL and Virgin in takeover talks
05 Dec 05 |  Business
Virgin Mobile snubs first NTL bid
07 Dec 05 |  Business

The BBC is not responsible for the content of external internet sites


Americas Africa Europe Middle East South Asia Asia Pacific