LONDON-The board of Virgin Mobile Holdings plc rejected a $1.4 billion takeover offer from U.K. cable operator NTL Inc.
“The board has concluded that the potential offer materially undervalues Virgin Mobile,” the company said in a statement.
NTL announced that it had made the offer Dec. 5. The company was seeking to pick up U.K.-based mobile virtual network operator Virgin Mobile in a bid to become the first company in the United Kingdom with the ability to bundle voice, data, video and wireless services.
In response to press speculation on its rejection of NTL’s offer, Virgin Mobile’s board released another statement noting that in reaching its decision, it only considered the $5.66 per share price that NTL had presented.
“[The board] did not consider any other price, nor did it solicit any other price,” the company said.
Virgin Mobile majority shareholder Richard Branson has said that only about $44 million stood in the way of the proposed takeover, according to published reports.
Speaking in Australia, Branson also said that the merger of the two companies was something that everyone wanted to happen, and that he hoped either NTL would make a higher offer or the companies could reach a compromise to seal the deal.
Branson has reportedly agreed to exchange his Virgin Mobile holdings for a combination of NTL stock and cash if a sale proceeds.
Virgin Mobile Holdings operates Virgin Mobile USA L.L.C. as a joint venture with network partner Sprint Nextel Corp. Virgin Mobile USA representatives could not immediately comment on whether a takeover by NTL would affect Virgin’s U.S. operations.
