Virgin Mobile has rejected a takeover offer from cable operator NTL on that grounds that the offer price was too low, the firm announced today.
The proposed deal, unveiled on Monday, offered 0.09298 shares of NTL common stock per Virgin Mobile share, or a cash payment of £3.23 per share. Virgin Mobile shares closed in London on Friday at £3.13.
Virgin Mobile said its board had carefully considered the offer and concluded that it undervalues the company.
It is a mobile virtual network operator, meaning it doesn’t own its own cellular networks but resells service from other operators. It offers service in the UK, the US, Canada and Australia.
NTL said it hoped to buy Virgin Mobile so that it could offer customers a "quadruple play" including internet, television, fixed line and mobile services.
NTL and Virgin are already partners in another venture. NTL has a licence agreement with Virgin Enterprises for the exclusive use of the Virgin brand in broadband. NTL is also negotiating with Virgin Enterprises on a similar licence for television, fixed line and mobile telephony.