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.”
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