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Wednesday, April 5, 2006
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NTL Buys Virgin Mobile for $1.67 Billion
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Virgin Mobile announced on Tuesday that it has accepted the takeover offer from British cable provider NTL.
Under this agreement, a telecommunications powerhouse combining high-speed Internet, mobile and landline phone service, and cable television will be created. The company will use the Virgin brand name under a 30-year licensing deal.
NTL paid 962.4 million pounds ($1.67B) for Virgin Mobile after negotiating for four months to acquire the cellular service provider. NTL previously offered 817 million pounds ($1.4B USD) for the company, however shareholders rejected the deal.
Under the new deal, Virgin head Sir Richard Branson will receive 349 pounds per share for his majority stake in the company, with the minority shareholders receiving 372 pounds per share. Furthermore, Virgin Mobile will continue to be based in the U.K., NTL said.
The Financial Times also reported in Februrary that Virgin Mobile's CEO Tom Alexander has been persuaded to stay under the takeover agreement. Virgin Mobile's current management will remain in place and the operator will act as a separate unit within NTL, the paper said. |
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