Branson prepared to lower his asking price for Virgin Mobile
LONDON - Sir Richard Branson is prepared to accept less for his stake in Virgin Mobile so that NTL will go ahead with its takeover of the company.
Last week, the Virgin Mobile board rejected the offer of 323p a share made by NTL, which valued the company at £817m. It said the offer "materially undervalued" the company.
Minority shareholders, who own the 28% of Virgin Mobile that is publicly traded, are holding out for a higher offer, but NTL is believed to be sticking to its guns. Virgin Mobile's share price had moved to 355p when the market closed on Friday.
Branson's willingness to accept a lower price, closer to 300p a share, for his 72% stake, may allow the deal to proceed, according to the Financial Times.
If NTL acquires Virgin Mobile, NTL would pay Branson a percentage of revenues in return for licensing the Virgin brand from his Virgin Group. The size of the cut is unknown as yet, and may still be under negotiation. The percentage Virgin Mobile pays Virgin Group is 0.25%.
If the merger goes ahead, NTL will be rebranded as Virgin Media doing away with the NTL brand name.
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