Cable company NTL Bids on Virgin UK

[Barry]

U.K.cable company NTL has bid $1.4 billion for U.K. mobile virtual network operator Virgin Mobile. Virgin Mobile confirmed that it had received an offer from NTL. The bid appears to cover only Virgin Mobile in the United Kingdom and not Virgin Mobile USA.

The deal would make NTL/Virgin the first company in the United Kingdom with the ability to bundle voice, data, video and wireless services. NTL acquired a smaller rival, Telewest, in October for about $6 billion. If NTL's deals go through, the combined NTL/Telewest/Virgin Mobile company would have 3.3 million cable customers, 2.5 million broadband customers, 4.3 million voice customers and 5 million wireless customers.

The merged company is expected to take the Virgin name.

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[Barry]

The board of Virgin Mobile Holdings plc has rejected a $1.4 billion takeover offer from U.K. cable operator NTL. Virgin Mobile Holdings currently operates Virgin Mobile as a joint venture with network partner Sprint Nextel. Virgin Mobile public relations spokesperson Jennifer Kronstain said an NTL takeover, if it happens, would not affect Virgin Mobile USA's operations because the two companies operate as separate entities

NTL announced that it had made the offer Dec. 5. The company was seeking to pick up U.K.-based mobile virtual network operator Virgin Mobile in a bid to become the first company in the United Kingdom with the ability to bundle voice, data, video and wireless services.

Virgin considered the $5.66 per share price that NTL had presented. Virgin Mobile majority shareholder Richard Branson has said that only about $44 million stood in the way of the proposed takeover, according to published reports.

Branson also said that the merger of the two companies was something that everyone wanted to happen, and that he hoped either NTL would make a higher offer or the companies could reach a compromise to seal the deal.

Branson has reportedly agreed to exchange his Virgin Mobile holdings for a combination of NTL stock and cash if a sale proceeds.

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