ntl expected to increase Virgin offer
# Jan 2, 01:02 PM by Frank
Sources indicate that cable company ntl is likely to make another offer to purchase Virgin Mobile in the near future. The Sunday Times newspaper reports ntl is considering raising its bid for the group to ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â£3.60 a share, and could table the new offer as early as next week.
The new offer will probably be only about 10% higher than the previously rejected bid of ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â£3.23. So far, it is unclear whether Virgin MobileÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬ÃƒÂ¢Ã¢â‚¬Å¾Ã‚Â¢s board or independent directors would be open to such an offer. The directors are reportedly hoping for a figure of about ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â£4.00/share, but a compromise hasnÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬ÃƒÂ¢Ã¢â‚¬Å¾Ã‚Â¢t been altogether ruled out.
ntl’s executive vice-chairman Simon Duffy, who is being advised by Goldman Sachs, is understood to recognise the need to increase the offer in order to win the support of institutional shareholders who have a 28% stake in Virgin Mobile.
But the offer may still not be high enough, with shares in Virgin Mobile closing at ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â£3.77 last Friday. ntl’s initial offer was the result of months of secret negotiations between Mr Duffy and Sir Richard Branson, whose Virgin Group holds a 72% stake in the mobile business.
It is thought NTL wants to have a deal in place before its new chief executive Stephen Burch takes up his post on January 16. ntl declined to comment on the Virgin offer speculation, according to reports.