In early December, NTL offered 323 pence ($5.61) in cash for each Virgin Mobile share, which represented a 3.9% premium to Virgin Mobile’s closing price on the day before the deal was announced. The deal was backed by Virgin Mobile’s largest shareholder, the British entrepreneur Sir Richard Branson, who has a 72% stake in the operator.

However, the small premium did not impress Virgin’s minority shareholders who control 28.5% of the operator, and a week later the operator’s management team rejected the offer. The minority shareholders include Fidelity, Morley Asset Management, Deutsche Asset Management, and boutique fund manager Aberforth Partners.

Virgin Mobile’s board of directors rejected the deal on the grounds that it undervalued the business. According to the Sunday Telegraph, the minority shareholders are looking for an offer of 400 pence ($7.05) a share.

Branson is keen for the deal to go ahead. He would become NTL’s largest shareholder with a 14% stake and a possible seat on the NTL board. He had hinted earlier that the minority shareholders might accept an offer around 360 pence ($6.35) a share, although this now seems unlikely.

Negotiations are due to kick off again this week, yet there are reports that a group of private investors, which has been tracking NTL for a while now after its agreement to purchase fellow cable operator Telewest Global Inc for $6bn.

It is thought that the private investors, Apax Partners, Cinven, Kohlberg Kravis Roberts, Premier, Providence Equity Partners, could pay as much as 8bn pounds ($14.12bn) for the entire entity if the Virgin Mobile deal goes ahead.

Meanwhile, late last week ntl Business scored a valuable win after it was selected as the exclusive telephony carrier for Spectrum Interactive, the second largest operator of payphones in the UK. NTL will now connect Spectrum’s 7,000 UK phone kiosks carrying voice traffic.