While the 817m pounds ($1.42bn) deal had received the public backing from Virgin Mobile’s largest shareholder, British entrepreneur Sir Richard Branson with his 72% stake, the board has always appeared less keen. Upon receipt of the original offer earlier this week, the management team issued a terse statement and said that in considering its response, the board of Virgin Mobile will be mindful of its duty to maximise value for all shareholders.

Now the board has rejected the deal on the grounds that it undervalued the business. However, there is little doubt that in reality this is just a ploy to coax a higher offer from NTL.

The minority shareholders who control 28.5% of the operator, include Fidelity, Morley Asset Management, Deutsche Asset Management, and boutique fund manager Aberforth Partners. They will be keen to ensure that the cable operator pays top dollar for the company.

Indeed, the prospects of a deal between the two still seems high likely, especially as Branson has public stated that he believed a deal was still on the cards despite the rejection.

Speaking to the BBC’s Today programme, Branson maintained he would be very surprised if an agreement wasn’t reached and claimed that the two sides differed on price by as little as 25m pounds ($44m).

I don’t think NTL are going to fall out over what is a relatively small sum of money, he said. When asked what he thought the chances of a deal being struck were, he told the BBC: If I was a betting man I would say it would be over 90% (chance), though obviously I may be wrong.

Indeed, the market did not seem to be unduly troubled by the rejection, and Virgin Mobile’s share price rose 2.32% on the London Stock Exchange to 353.5p ($6.19) as of 4.30pm GMT on Thursday.

In a statement, Virgin Mobile reiterated that it in reaching its decision to reject NTL’s approach, it considered the matter carefully, mindful of its duty to maximise value for all shareholders. The Independent Board concluded that the potential offer materially undervalues Virgin Mobile. The operator said it had not solicited a new NTL bid.

NTL’s original offer had valued each Virgin Mobile share at 323 pence ($5.61) in cash, which represents a 3.9% premium to Virgin Mobile’s closing price of 311p ($5.41) last Friday, the last day of trading before the offer was announced.

It is thought that the minority shareholders want at least 20p ($0.35) added to NTL’s 323p ($5.61) a share offer, which translates to a bid in the region of 345p ($6.04) a share, which would value Virgin Mobile at about 891m pounds ($1.56bn). Minority investors will also want hard cash rather than the less desirable NTL shares.

Branson on the other hand will be happy to become NTL’s largest shareholder with a 14% stake if the deal goes ahead. He is also expected to be actively involved in management of the new company, with a possible seat on the board.

There is also market speculation that Virgin Mobile is trying to entice other bidders to enter the fray, in an attempt to kick-start a bidding war. Yet there seems little evidence for such speculation, as most of the likely contenders have all denied interest in a takeover of Virgin Mobile.