Vodafone 'held takeover talks with Virgin'
Mobile phone giant Vodafone held talks with Virgin Mobile over a possible takeover just months before its stock market debut, it was reported today.
Vodafone discussed the move earlier this year after it was approached by Virgin over the possibility of leasing capacity on its network, according to The Sunday Telegraph.
Virgin – part of Richard Branson’s empire – differs from its UK rivals as a “virtual operator” and later chose to sign a new deal to use the network of T-Mobile.
A tie-up would have created the largest mobile phone operator in terms of market share, adding Virgin’s 4.2 million customers to the 14.1 million at Vodafone.
In addition, Virgin generates the bulk of its revenues from pre-pay customers while Vodafone focuses on long-term contract deals that offer higher value.
The newspaper said a price tag of £850m (€1,265m) was given to Virgin during the talks, but it is understood the two companies could not agree on a valuation.
A Vodafone spokesman refused to comment on the report today, saying it did not comment on market rumour or speculation.
Virgin floated on the stock market last month with a value of £811m (€1,207m) after cutting its price range due to a lukewarm response from investors.
The company employs 1,400 staff at three sites – Trowbridge in Wiltshire, London and Daventry in Northamptonshire.
Revenues increased by 24% to £123.6m (€184m) between April and June, driven a 7.2% increase in new users to its services.
The Sunday Telegraph said the decision by Richard Branson not to pursue takeover talks underlined his determination to return a Virgin company to the stock market.
Vodafone has shown an appetite for acquisitions this year as new chief executive Arun Sarin continues the legacy of founder Sir Christopher Gent, who stepped down last year.
In February, Vodafone became embroiled in an auction for US-based AT&T Wireless that it lost to Cingular.
