Investors 'holding out for higher offer for Virgin mobile'
Directors of Virgin Mobile have been told by institutional investors not to accept any takeover bid from cable giant NTL that is less than 400p a share, it was reported today.
Institutions are understood to have made their feelings known after Sir Richard Branson – whose Virgin Group owns a 72% stake in the mobile phone firm - said last month that a deal could be sealed if NTL raises its price modestly from £817m (€1.19bn).
Virgin Mobile has rejected an offer worth 323p a share as too low, but Sir Richard implied that a bid of 360p per share could be enough to secure a recommendation.
A spokesman for Virgin Mobile said: “We cannot comment on any discussions with shareholders. There is only one offer on the table of 323p and the board has made its views pretty clear.”
According to the Sunday Telegraph, NTL is due to return to the negotiating table this week. It wants to create a communications giant offering services ranging from mobile telephony to TV to about nine million customers under the Virgin brand.
The report added that a higher offer would prompt Virgin Mobile chairman Charles Gurassa to insist that the cable company and Sir Richard disclose any talks that have taken place with a private equity consortium known to be interested in making a bid for the enlarged Virgin-NTL group.
It is thought that a consortium led by Permira and including Apax Partners and Cinven have held talks with a number of banks about the structuring of a deal that could ultimately be worth £8bn (€11.6bn).
But the existence of talks between the cable firm, Sir Richard and the consortium could have a bearing on whether shareholders in Virgin Mobile chose to take cash or equity in NTL for their stakes.
