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NTL raids Branson's piggybank for new Virgin bid
New offer reportedly values MVNO at £961m...

By Jo Best

Published: Monday 16 January 2006

NTL has raised its bid for Virgin Mobile, reportedly financed with extra cash from Virgin CEO Richard Branson's pocket.

Virgin Mobile confirmed in a statement that the pair are once again in discussions regarding a potential union, following a revised offer from the cable company.

While no financial details were announced, according to reports, the new proposed deal could be as high as 372p per share - a substantial increase on the original offer of 323p per share.

The initial bid, made last December, put Virgin Mobile's price at £817m. Shareholders rejected it, saying it "materially undervalued" the MVNO.

It's thought the increased bid will persuade Virgin Mobile's shareholders to accept the takeover.

NTL is expected to offer 360p of the proposed 372p per share, with Branson providing the additional 12p - valuing the mobile company at around £961m. Branson will fund the extra 12p per share from the proceeds he will receive from the sale of Virgin Mobile, and will go on to hold 13 per cent of NTL once the takeover has been agreed.

Should the companies' union come off successfully, NTL will start to offer quadruple-play services - mobile and fixed-line telecoms, video-on-demand, TV and broadband access. The company is to operate under the Virgin brand.