NTL finally manages to buy Virgin Mobile. Maybe.

NTL finally manages to buy Virgin Mobile. Maybe.


This is about the fifth article I have written about the attempted purchase of Virgin Mobile by NTL, but it should also be the last. NTL has made three new offers to purchase Virgin Mobile and one has been chosen. One of the offers was all cash, the second all shares and the third was a combination of cash and shares. The value of the three deals ranged from ₤883 million to ₤940 million.

Richard Branson is the majority shareholder of Virgin Group, which owns 71% of Virgin Mobile. He has accepted the third offer, which makes the eventual success of the deal much more likely. He will receive 0.074384 units of NTL stock and 67 pence in cash for each Virgin Mobile share he owns. Though this deal has the lowest total current value, something must be attractive about it to Branson – likely the combination of cash liquidity and future stock appreciation. The other shareholders can choose this same option or they can choose to receive 372 pence per share or 0.09298 shares of NTL per share. Shares closed Monday at 368 pence per share.

This is not the first time a deal has tentatively been agreed to. Branson was open to an offer of 323 pence per share last month, but the board of Virgin Mobile unanimously rejected it in the end. This one has a better chance of acceptance, but I won’t believe it for sure until it is signed and sealed.