UK cable operator ntl has confirmed that it has made a takeover approach to Virgin Mobile valuing the mobile virtual network operator (MVNO) at around GBP810 million. Under the proposed deal, which has the support of the cellco’s majority shareholder Virgin Group, ntl has offered Virgin Mobile shareholders 0.09298 ntl shares for each Virgin share, or a cash alternative of GBP3.23 per share instead. Virgin Mobile has confirmed ntl’s approach to the Stock Exchange and says it is considering the bid in light of its responsibility to maximise value for all its shareholders. Meanwhile the cableco says it has also held preliminary talks with Virgin Mobile’s network provider T-Mobile UK about the bid, which has indicated it supports the proposed merger. In a statement however, ntl pointed out that ‘These discussions are preliminary in nature and subject to the satisfaction of certain further conditions, including due diligence’.
If successful in its takeover bid, ntl plans to use the Virgin brand name across its operations, to establish a heavyweight internet, television and telecoms services company that could take on the dominance of BT and satellite broadcaster BSkyB. ntl, which is also in the throes of a seperate takeover of rival cable operator Telewest, provides TV services to two million British homes and has more than 1.72 million broadband subscribers. Meanwhile, Virgin Mobile, which floated on the London Stock Exchange in 2004, has more than five million mobile users, and a tie-up with ntl would give it 2.3 million fixed line telephone accounts. Moreover, the enlarged entity would be able to broadcast TV direct to Virgin mobile phones, making it a one-stop shop for consumers.