Possible NTL-Branson link-up puts heat on BSkyB

Cable firm NTL turned up the heat on rival BSkyB today by announcing plans for a possible takeover of Richard Branson’s Virgin Mobile group.

The proposed move values Virgin at around £817m (€1.2bn) and would create a new powerhouse in the British media industry, offering a range of services to around nine million customers under the Virgin brand.

The two parties are in talks about a tie-up, which it is thought could result in Branson holding a 14% stake in the new company. His Virgin Group currently owns 72% of the mobile operator, which runs off T-Mobile’s network.

Shares in BSkyB and telecoms giant BT fell today as investors fretted at the prospect of their rival becoming the UK’s first “quadruple play” provider, offering mobile phones, fixed-line phones, internet broadband and television.

The latest development in a period of intense activity in the sector comes just two months after NTL announced its proposed £3.4bn (€5bn) tie-up with cable firm Telewest.

Shares in Virgin Mobile rose well above the potential offer price to an all-time high, amid speculation a higher rival bid could be on the cards or that NTL will be forced to up its price for the company, which only floated on the stock market a year ago.