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Virgin Mobile accepts NTL's bid

£962m enough to tempt board

NTL's bid for mobile phone company Virgin Mobile has won the approval of Virgin Mobile's board, the companies announced today. The cash-and-stock offer values Virgin Mobile at £962m, NTL said.

The cable-TV operator intends to offer both mobile and fixed-line telecommunications services under the Virgin brand, which it has licensed from Virgin Enterprises for a period of 30 years.

Since NTL's merger with another cable TV operator, Telewest, in March, the company's UK cable network reaches around 50 percent of UK homes, although only around 5 million of the 12 million covered are subscribers, according to NTL figures. The network also reaches 85 percent of UK businesses, NTL said.

The purchase of Virgin Mobile will allow NTL to add mobile services to its existing mix of cable TV, telephony and internet access.

Virgin Mobile has operations in five countries: the UK, the US, Australia, Canada and - since Monday - France. It is an MVNO (mobile virtual network operator): that is, it has no wireless network infrastructure of its own, but resells airtime on other companies' networks under its own brand. In the UK, it resells the service of T-Mobile.

In France, Virgin Mobile's service is run by Omer Telecom, a subsidiary of Carphone Warehouse. Omer already has experience running an MVNO, as it is the company behind the regional operator Breizh Telecom, which serves the region of Brittany in northwest France. The new virtual operator will use the network of Orange.

NTL has offered Virgin Mobile shareholders three options: either £3.72 per share in cash; 0.23245 NTL shares per Virgin Mobile share held (worth £3.89 at Monday's closing price), or 0.18596 NTL shares and £0.67 in cash per Virgin Mobile share (worth £3.78 at Monday's closing price).

Holders of 72 percent of the Virgin Mobile shares have already voted to accept the offer, NTL said.


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