NTL raises acquisition offer for Virgin Mobile

Telecommunications and media firm NTL has renewed its take-over bid for Virgin Mobile, providing shareholders with a choice of three options including a combination of cash and shares.

The board of directors rejected NTL's previous offer of 323p per share, which had been approved in principle by Virgin Group founder Sir Richard Branson, citing an undervaluing of the business as the reason for their decision.

Discussions were temporarily halted, giving NTL an opportunity to reassess its offer, should the company still consider the acquisition a viable business move. The revised deal includes three increased options for shareholders of Virgin Mobile to consider, pushing the take-over bid closer to a satisfactory completion.

The first option is a cash offer of 372 pence per Virgin Mobile share held, though some analysts are suggesting that shareholders may hold out for an offer closer to 400 pence per share.

Option two is a purely share based offer of 0.09298 NTL common stock shares per Virgin Mobile share held. The final option is a combination of 0.074384 NTL shares and 67 pence in cash, which Virgin Mobile's majority shareholder, Sir Richard Branson, has indicated he would be prepared to accept.

Discussions continue in spite of Sir Branson's acceptance, and the deal remains subject to satisfactory compliance with various pre-conditions and an agreement from both minority shareholders and the Virgin Mobile board of directors.

If the new take-over proposition is accepted and completes as planned, NTL will be the first UK communications company to provide cable television, telephone, broadband Internet and mobile telephony services through a single offering. The company's share of the UK market is also set to increase as a result of its merger with rival communications company Telewest Global.