Virgin Mobile Rejects NTL Offer of Â£817 Million
Virgin Mobile has rejected a much hyped up offer from the cable group NTL. The offer made by NTL was for around Â£817 million and the board of the Virgin Mobile decided that the offer materially undervalued the company. The decision to reject the offer was totally unanimous. The investors in Virgin expected an offer close to about 345p a share, which brings the total value of the company at around Â£891 million.
However, this statement somewhat contradicts the wishes of Virgin Mobileâ€™s biggest shareholder, Sir Richard Branson who said that he would have been happier if the board had decided to accept the offer for the merger which would have formed a much bigger entity capable of taking on News Corporation in the country by providing a bouquet of services.
Branson also said that he had no hard feelings and would accept whatever the board of the company decided in the best interest of Virgin Mobile. He currently has just one member on the board in the form of Gordon McCallum, who began working with the Virgin Group in 1996. However, the talks about the takeover did help the company improve its share prices in the market.
In fact, their were rumors in the market about other players who were interested for a possible deal with Virgin. These included names of telecoms groups such as BT, Vodafone, France TÃ©lÃ©com, Hutchison Whampoa, and TelefÃ³nica. However, all of them have categorically denied having any interest in the company.
Virgin Mobileâ€™s board stated in the statement: â€œMindful of its duty to maximize value for all shareholders, in reaching this decision the board has carefully considered the potential offer and consulted with major independent shareholders. The board has concluded that the potential offer materially undervalues Virgin Mobile.â€