ntl agrees Virgin Mobile deal

4 April 2006 10:54 GMT / By Stuart Miles

Ntl:Telewest and Virgin Mobile are to merge it was announced this morning, becoming the first company to offer Boardband, TV, Fixed line and mobile telephony services.

Even though ntl:Telewest is buying Virgin Mobile, the new company will operate under the Virgin brand following a 30 year licensing agreement.

“ntl:Telewest and Virgin Mobile have reached agreement on the terms of a combination of the two businesses” A spokesman told Pocket-lint this morning.

NTL said the new company will have around 9.5 million customers and will be rebranded as Virgin over the next 12 months.

ntl:Telewest is hoping that the addition of a mobile arm to its company will increase bundling and cross-selling opportunities for mobile services into customer homes serviced by ntl, and triple-play services to Virgin Mobile subscribers.

ntl:Telewest has said that Virgin Mobile's operating business will continue to be led by members of Virgin Mobile's current management team, and it is intended that a marketing director from Virgin will join ntl, bringing Virgin's brand expertise to the ntl management team.

Virgin Mobile shareholders will be able to either elect for a complete cash offer for their shares, a complete share swap or cash and share swap.

The Cash Offer values the existing issued share capital of Virgin Mobile at approximately £962.4 million - a premium of 19.6% on Virgin Mobile's December 2 share price.

Richard Branson will become the largest shareholder with a 10.7 percent stake in the company.

Commenting on the Offer, James Mooney, Executive Chairman of ntl, said:
“We are delighted to announce the recommended Offer and the brand licensing with Virgin today, which not only delivers mobile capability to our product bundle but also gives us access to a leading consumer brand. It truly is a step-change transaction not only for ntl but for the media sector as an whole in the UK.

Central to today's announcement is our strong belief that offering a quad-play underpins true media convergence, and offering high quality communications services will, we believe, appeal to existing subscribers of the enlarged business as well as new customers. There is a natural appeal for mobile, telephony, broadband and television content and ntl is now truly unique in its mass market product offering.”

Full tags

Biz, Mergers, NTL, Virgin Mobile, Email, iPod, Zune