Speculation grows over Branson-NTL subsidy deal

Speculation was growing today that Virgin boss Richard Branson will stump up his own money to secure a deal with cable company NTL over the sale of Virgin Mobile.

The entrepreneur, whose Virgin empire owns 72% of the UK mobile operator, is thought to be putting in some of the money he will make from the sale.

Virgin Mobile released a statement last night saying it had received a revised offer from NTL and is now thought to be considering whether to recommend the deal to shareholders.

The latest offer is understood to be worth 360p, with Branson offering an extra 12p to shareholders to make it 372p a share.

That would cost him £9m (€13.2m) and bring the value of the entire business to £961m (€1.4bn).

Branson is expected to receive a windfall of £110m (€161m) after subsidising shareholders if he takes 20% of his stake in the company as cash.

His remainder would be made up of shares in the new venture, which would give him a 13% stake in NTL and make him the company’s biggest single shareholder.

NTL wants to create a communications giant offering a range of services to about nine million customers under the Virgin brand.

A tie-up would create the UK’s first “quadruple play” provider, offering mobile phones, fixed-line phones, internet broadband and television.

The board of Virgin Mobile unanimously rejected NTL’s initial 323p-a-share approach in December – which valued the firm at £817m (€1.2bn) – after consulting its major independent shareholders.

Last night’s statement said: “The Independent Board of Virgin Mobile Holdings plc confirms that, following a revised approach from NTL, Virgin Mobile is in preliminary discussions with NTL which may or may not lead to a formal offer being made for the entire issued share capital of Virgin Mobile.”

A spokesman for the company said no other statement was imminent.