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Virgin Mobile demands more from NTL

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CIOL Bureau
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SYDNEY: Independent directors of Virgin Mobile want UK cable operator NTL Inc. to raise its 817 million pound ($1.4 billion) takeover offer, said Richard Branson, owner of 72 percent of the UK mobile phone company.

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The British entrepreneur said on Thursday he expected a deal would eventually be reached between Virgin Mobile's independent directors and NTL to allow a "formidable force" to engage the UK television and telecommunications market.

"It's a marriage that everyone wants to do," Branson told reporters after speaking to the Australian-British Chamber of Commerce as the chairman of Virgin Atlantic, an airline in which his Virgin Group owns 51 percent and Singapore Airlines Ltd. owns 49 percent.

He said he was hopeful either NTL would come up with a higher offer or a compromise would be reached to seal the takeover.

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"The non-executive directors have decided they want to try to extract better value from NTL and obviously I wish them well with that," he said. "The difference between what they've asked for and what NTL has offered is not considerable in financial terms."

The board of Virgin Mobile, the UK's fifth-largest mobile phone operator, rejected the NTL offer on Wednesday, saying it undervalued the company. An analyst said the board's decision suggested it would still be open to a deal at a higher price.

Gordon McCallum, representing Branson's Virgin Group, absented himself from the board's discussions. Branson had already agreed to swap his holdings for NTL and some cash if a deal proceeded.

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Branson said on Thursday the most likely new name of the merged entity would be Virgin TV. He also added that he was unlikely to be chairman of the rebranded company.

"(NTL Chief Executive Simon Duffy) has already made it clear to us that he wants our brand expertise," Branson said. "We will have a contractual say on things like marketing, public relations and customer service issues."

NTL approached Virgin Mobile with a cash or shares buyout offer on Dec. 5, aiming to create a TV, Internet, fixed-line and mobile phone powerhouse under the Virgin brand.

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Following the offer, Virgin Mobile's shares climbed to a year high of 356p, well above the 323p offer price, signalling that investors expected a sweetened offer or a counterbid.

Virgin Mobile last traded at 345-1/2p on Wednesday.

© Reuters

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