Virgin Mobile is 72% owned by Sir Richard Branson’s Virgin Group, which has given its initial backing to NTL’s bid. But following a meeting of its directors, Virgin Mobile said that it would be prioritizing all of its shareholders when considering whether to back or reject the deal.
NTL is already involved in a merger with longstanding rival Telewest. It said the Virgin Group had given verbal assurances that, if the takeover is successful, it would take up a shareholding in the enlarged group.
NTL added that there can still be no certainty that it will make a definite offer and it reserved the right to back out if talks fail over a licensing agreement. A completed deal would also see Sir Richard take a central role in the enlarged group and become its biggest single shareholder.
A deal to buy Virgin Mobile would allow NTL to add mobile services to its existing ‘triple-play’ line-up of TV, Internet and telephony services, giving it a potential advantage over rivals like BT Group and satellite broadcaster BSkyB .
Virgin Mobile is the country’s fifth-largest mobile phone carrier. It does not own its own network but instead rents capacity from Deutsche Telekom’s T-Mobile, which NTL said had indicated it was supportive of the proposed merger.
NTL is the second-largest UK pay-TV operator behind Sky and is the second-largest residential telephony provider, behind BT. Both are moving towards offering their own triple play packages.
