Virgin Mobile 'to seek higher ntl bid'
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ntl's £810m offer for Sir Richard Branson's Virgin Mobile is expected to be rejected as being too low. Reports said institutional shareholders had told Virgin Mobile directors that ntl's offer of 323p per share should be rejected in favour of a higher offer of at least 350p per share, valuing Virgin Mobile at more than £900m.
The Independent said Virgin Mobile's brokers, JP Morgan Cazenove and Investec, had valued the company at as much as 370p or 380p a share.
The move will allow ntl to offer a quadruple play of digital television, fixed and mobile telephony plus high-speed internet access, creating a player ready to take on the dominance of BT and BSkyB in telecommunications and pay-TV.
The Financial Times' influential Lex column said Virgin's appeal was its brand, which will be used for the merged entity. "Revenue synergies are difficult to quantify and even harder to realise. Virgin, however, which prides itself on customer service, should perform better than a brand sometimes known as 'NT Hell'," said Lex, which sounded a note of caution.
"Unfortunately, increased competition, which makes the deal a good idea, also raises doubts over its longer-term success. After its merger, ntl will have a weak balance sheet. With BSkyB moving into telephony and BT into TV, any reduction in churn or improvement in average revenues per user may not be permanent."
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