Virgin Mobile Accepts NTL Buyout Offer

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12:15 pm on April 4, 2006 | Category: Business, Telecom Services

Britain’s largest MVNO, Virgin Mobile has accepted a £962.4 million ($1.67 billion) buyout offer from cable operator, NTL, marking the creation of the UK’s first “quadruple-play” telecom provider.

As a result of this deal, the newly combined entity will be able to offer cable TV, broadband, fixed-line telephone service, and mobile phones under the trusted Virgin brand name. Many analysts believe that this will set the stage for industry-wide consolidation among competitors.

Current Virgin shareholders are being given a choice to accept either a cash offer of £3.72/share, a stock offer of 0.23245 NTL shares, or a combination of 0.18596 NTL shares and £0.67 in cash. This is a much better deal for Virgin shareholders than the £3.23/share offer that the company chose to reject in December.

Virgin’s founder and majority shareholder, Richard Branson, plans to accept NTL stock for his share in the company, and has agreed to license the Virgin brand name to the cable giant for a term of 30 years.