Branson 'could pull Virgin Mobile flotation'

Richard Branson is unlikely to go ahead with plans to float Virgin Mobile on the stock market unless he gets the right price, it was reported today.

Richard Branson is unlikely to go ahead with plans to float Virgin Mobile on the stock market unless he gets the right price, it was reported today.

It is understood that the entrepreneur could pull the flotation if the shares are not priced within the proposed range of 235p to 285p.

According to The Sunday Telegraph, Branson has been advised that he could make more money through a debt refinancing of Virgin Mobile and keeping the company private.

Virgin Mobile announced plans to float on the stock market just three weeks ago in a move that could value the group at around £960m (€1.4m).

Conditional dealings were due to begin this week and would mark the first flotation by part of the Virgin empire in 18 years.

However, it is believed that the minimum price of the proposed price range will not be reached.

One executive at financial betting firm Cantor Index was quoted as saying: “The closer to the bottom end of the range you get, the more attractive it is for Branson to keep Virgin Mobile private.”

Instead of pulling the flotation, the company could choose to slash the number of shares on offer to investors, the newspaper added.

This would increase competition among institutions for the stock and protect the price level.

Branson is expected to make a final decision on Tuesday night, before the scheduled debut on Wednesday.

Virgin Group hopes to raise more than £250m (€376m) from the listing, which will fund expansion elsewhere in the business.

The operation was founded five years ago and differs from rivals such as Vodafone and mmO2 as a “virtual operator” which uses the network of T-Mobile. It has more than four million customers and employs 1,400 staff at three sites - Trowbridge, Wiltshire, London and Daventry, Northamptonshire.

The reported lacklustre response to the Virgin float reflects the current mood of the London market, which has been drifting lower for several weeks.

Investors have been asked to back a number of new share offers in the last month, including advertising group M&C Saatchi and Branston Pickle-to-Typhoo Tea company Premier Foods, which is due to float on Tuesday.

Nobody from Virgin Mobile was available to comment today.

More in this section

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up
Home Delivery
logo-ie

HOME DELIVERY SERVICE

Have the Irish Examiner delivered to your door. No delivery charge. Just pay the cover price.