The board of Virgin Mobile has rejected telecommunications firm NTL's acquisition bid of GBP 817 million, instigating a temporary halt on the closure of a massive buy-out deal, the .
The buyout had been approved by Virgin Group founder, Richard Branson, who would sell his 71 per cent share in Virgin Mobile in return for a 14 per cent stake in the newly combined company. However, the ultimate decision rests with the board of directors, who rejected the offer on the grounds that NTL had undervalued the business.
"The independent board confirms that, in reaching its decision, it only considered the 323p per share potential offer price announced by NTL. It did not consider any other price, nor did it solicit any other price," Virgin said in a company statement.
The UK's fifth largest mobile operator may still be close to securing a buyout deal with NTL, the result of which would be the creation of Britain's first 'quadruple-play' operator, providing cable television, telephone, broadband internet and mobile telephony services through a single offering.
"I don't think that NTL are going to fall out for what is relatively a small sum of money... I have a feeling that somehow an agreement will be reached. It's quite close," Branson told BBC Radio's Today program.
The enigmatic executive has stepped back from the proceedings, leaving the negotiations and potential compromise bid to NTL and the Virgin Mobile board. "The non-executive directors have decided they want to try to extract better value from NTL and obviously I wish them well with that," Branson stated.
Negotiations continue, and the promise of a higher bid - either from NTL or potentially from another outside party - has sparked a massive hike in the share price. Stock reached a record high of 356 Pence on Monday, and currently rests at around 351 Pence.