NTL completes Virgin Mobile acquisition
Shareholders accept revised cash/share offering
After months of discussions, rejected offers and financial revisions, the terms of communications giant NTL's acquisition of Virgin Mobile have finally been agreed upon by all parties.
The deal will create the UK's first quadruple-play communications company, adding mobile to NTL's existing offering of fixed line telephony, cable television and broadband internet services. The integration of the two companies will not be an immediate priority for NTL however, as the company is currently focusing on the development of its other recent acquisition - that of rival telecommunications firm Telewest Global.
In a conference call with reporters, Steve Burch, NTL chief executive, commented: "Virgin Mobile is going to stay quite independent for the next year. My first priority is the integration of Telewest and NTL."
"We're going to start cross-selling and upselling, but we're not going to get too involved in the integration until next year," he added.
Virgin Mobile's board of directors rejected NTL's initial offer of 323p per share in December last year, citing an undervaluing of the company's worth and a lack of benefit for minority shareholders as the reason for their decision.
After more poring over the accounts and discussions with those parties with a vested interest in the deal, NTL produced a revised offer at the start of the year, which was accepted by majority shareholder Sir Richard Branson and the board of directors, but remained subject to minority shareholder agreement.
The closing deal offers minority shareholders the option of exchanging each of their shares for either 372p cash, 0.23245 NTL shares valued at 389p, or a mix of cash and NTL stock worth 378p per share - the same deal that Sir Richard Branson has agreed to for his 71.2 per cent share of Virgin Mobile.
The new combined company will be re-branded within the next twelve months, and whilst the existing management of Virgin Mobile will retain their positions, a marketing director from the firm will move to NTL following the completion of the deal, to offer Virgin's brand experience to the company.