Virgin and NTL sign to tune of $2.8b

LONDON - Virgin Mobile Holdings, the mobile phone company controlled by Richard Branson, has accepted a £962 million ($2.8 billion) offer from NTL, handing the cable company a recognised brand and a broader product range.

Virgin Mobile shareholders are being offered 372 pence cash per share as part of a raised bid, said NTL, which is based in Hook, England.

Branson's Virgin Group will receive about £123 million in cash and will become NTL's biggest single shareholder, with a 10.6 per cent stake. Branson will also sit on NTL's management board.

The purchase lets NTL add a mobile phone service to its internet, television and fixed-line phone packages to help attract more customers as competition increases from companies such as Cable & Wireless.

"It's easier to attract customers if you can offer TV, internet, fixed-line and wireless services in a single package," said Boris Boehm, a Hamburg-based fund manager at Nordinvest. "Many customers want to use all these services, and it's convenient if you have to sign only one contract."

NTL, which plans to adopt Virgin's brand on all products, is targeting its second multibillion-dollar acquisition in less than a year. It agreed in October to buy Telewest Global, Britain's second-largest cable operator, for US$6 billion ($9.9 billion).

Virgin Mobile doesn't own a mobile phone network, and instead buys capacity from T-Mobile International, the wireless business of Deutsche Telekom.

- BLOOMBERG