Virgin Mobile accepts NTL's £962 million bid

Mobile virtual network operator Virgin Mobile has agreed to be acquired by cable TV operator NTL for $1.67 billion.

NTL's bid for British mobile phone company Virgin Mobile Holdings (UK) PLC has won the approval of Virgin Mobile's board, the companies announced Tuesday. The cash-and-stock offer values Virgin Mobile at £962 million (US$1.67 billion), 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 Global, in March, the company's U.K. cable network reaches around 50 percent of U.K. homes, although only around 5 million of the 12 million covered are subscribers, according to NTL figures. The network also reaches 85 percent of U.K. 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 U.K., the U.S., Australia, Canada and -- since Monday -- France. It is a mobile virtual network operator (MVNO): that is, it has no wireless network infrastructure of its own, but resells airtime on other companies' networks under its own brand. In the U.K., it resells the service of T-Mobile International AG & Co. KG.

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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