NTL Incorporated (NASDAQ: NTLI) ("ntl") and the Independent Board
of Virgin Mobile Holdings (UK) plc ("Virgin Mobile") are pleased to
announce that they have reached agreement on the terms of a cash
offer, with a share alternative offer and a cash and share
alternative offer, to be made by ntl and one of its wholly owned
subsidiaries to acquire the entire share capital of Virgin Mobile
(the "Offer"). Full details of the Offer are detailed in an
announcement made today in the United Kingdom under Rule 2.5 of the
U.K. Takeover Code. Under the Offer, Virgin Mobile Shareholders can
elect for: (1) 372 pence in cash for each Virgin Mobile share; or
(2) the share alternative of 0.23245 shares of ntl common stock for
each Virgin Mobile share, valued at 389p per share based on the
closing price of ntl's common stock and the $/GBP exchange rate at
3 April 2006; or (3) the share and cash alternative of 0.18596
shares of ntl common stock, valued at 311p per Virgin Mobile share
based on the closing price of ntl's common stock and the $/GBP
exchange rate at 3 April 2006, plus 67 pence in cash, for each
Virgin Mobile share. The Cash Offer values Virgin Mobile at
approximately GBP 962.4 million. Virgin Group Investments Limited
("Virgin Group"), which beneficially owns approximately 71.2 per
cent. of Virgin Mobile's shares, and Virgin Entertainment
Investments Holdings Limited ("Virgin Entertainment") have
irrevocably undertaken, irrespective of whether any higher
competing bid is made, to elect in full for the share and cash
alternative. Other Virgin Mobile shareholders, who hold an
additional 0.82 per cent. of Virgin Mobile's shares, have also
irrevocably undertaken to accept the Offer. Virgin Mobile is the
UK's leading mobile virtual network operator with 4.3 million
customers. Virgin Mobile uses the T-Mobile network for the
transmission of its traffic. For the last twelve months ended
September 30, 2005, Virgin Mobile had total revenues, under IFRS,
of GBP 539 million. Virgin Mobile does not operate outside of the
United Kingdom, and does not own Virgin Mobile in the United States
or in other countries. ntl is also entering into a long-term
exclusive license agreement with Virgin Enterprises Limited under
which its existing license to use certain Virgin trade marks within
the United Kingdom and Ireland in respect of its internet business
will be extended to television, fixed line telephony and, upon
completion of the acquisition of Virgin Mobile, mobile telephony,
as well as the acquisition and branding of sports, movies and other
premium television content and the branding and sale of certain
communications equipment, such as set top boxes and cable modems.
The agreement will provide for an annual royalty of 0.25% of
relevant consumer revenues, subject to a minimum annual royalty of
GBP 8.5 million (the royalty would have been approximately GBP 9
million based on 2005 revenues including Virgin Mobile and
Virgin.Net). ntl will also have the right to adopt a corporate name
that includes the Virgin name. In connection with the agreement,
Virgin Enterprises will have the right to propose a candidate to
serve as a director of ntl, and it will also have the right to
nominate a senior marketing executive as an ntl employee. Pursuant
to the U.K. Takeover Code, the license agreement is subject to
approval by a majority of the Virgin Mobile shareholders who are
not affiliated with the Virgin Group. ntl expects to commence the
proposed re-branding within 12 months of the license agreement
becoming unconditional. Closely following the merger of ntl and
Telewest to create the UK's leading triple-play provider, ntl's
combination with Virgin Mobile and the proposed re-branding of its
combined consumer businesses with the Virgin brand represents an
important milestone in ntl's history. ntl believes the combination
and re-branding of its combined consumer operations will deliver
wide-ranging strategic and financial benefits to shareholders. In
particular, ntl believes that the combination with Virgin Mobile
and the re-branding of the combined consumer operations with the
Virgin brand will: -- help transform it from the UK's leading
triple-play cable provider into a national entertainment and
communications company, harnessing the powerful Virgin consumer
champion brand -- enhance ntl as a scale competitor in the UK,
enabling ntl to compete more effectively with the large incumbents
in the UK telecommunications market. In addition, the extension of
ntl's product suite to include mobility will, ntl believes, provide
a strong platform for innovation and development of innovation
converged products, such as converged fixed and mobile telephony
devices, and video and voice services -- appeal to existing and new
consumers by offering a wide range of high quality communications
services from a single provider, with the unique flavour and
customer focus of the Virgin brand -- allow it to extend its
expertise in bundling and cross-selling communications products to
mobile telephony -- provide potential for revenue synergies: -0- *T
-- increasing penetration and reducing customer churn by providing
an appealing product suite under the Virgin brand -- increasing
average revenue per user through the effective cross-selling of
mobile services into customer homes serviced by ntl, and
triple-play services to Virgin Mobile subscribers *T -- not
materially affect ntl's current leverage. Other potential benefits
anticipated include savings on some of the re-branding costs it may
have incurred had it rebranded under a newly created brand, and the
use of certain existing capital allowances to offset Virgin Mobile
taxable income Virgin Mobile will retain its existing brand and
will continue to be based in the UK. Virgin Mobile's operating
business will continue to be led by members of Virgin Mobile's
current management team, and it is intended that a marketing
director from Virgin will join ntl, bringing Virgin's brand
expertise to the ntl management team. The Offer will be implemented
through a U.K. Scheme of Arrangement. After receiving court
approval to hold a shareholder meeting, Virgin Mobile shareholders
will be asked at a meeting of shareholders to approve the Scheme of
Arrangement. The court will then be asked to confirm the fairness
of the Scheme. The Scheme will be structured so that the ntl shares
issued in the Scheme will be exempt from registration under the
U.S. Securities Act of 1933, as amended. Completion of the Scheme
is expected in late June 2006. The Offer is subject to competition
authority approval in the United Kingdom and is also subject to the
shareholder vote described above relating to the license agreement.
The Offer is not subject to approval by ntl shareholders. ntl will
finance the cash portion of the Offer (approximately GBP 414
million, assuming that all of the shareholders other than those
affiliated with the Virgin Group take cash), the refinancing of
Virgin Mobile's outstanding indebtedness (approximately GBP 193
million as at September 30, 2005) and transactional expenses
through GBP 475 million of additional bank borrowings committed
under its existing facility and cash on hand. The Independent Board
of Virgin Mobile, who have been so advised by Morgan Stanley &
Co. Limited, consider the terms of the Offer to be fair and
reasonable. In providing advice to the Independent Board, Morgan
Stanley & Co. Limited has taken into account the commercial
assessments of the Independent Board. The Independent Board of
Virgin Mobile has indicated to ntl that it intends unanimously to
recommend that the Virgin Mobile shareholders vote in favor of the
Scheme at the appropriate meetings, as the Independent Directors
have undertaken to do in respect of all their own beneficial
holdings of Virgin Mobile shares. Virgin Mobile shareholders
considering making an election for the share alternative or for the
share and cash alternative are referred to the investment
considerations that will be set out in the Scheme document. The
decision as to whether Virgin Mobile shareholders make an election
for the share alternative or for the share and cash alternative
will depend on their individual circumstances. If Virgin Mobile
shareholders are in any doubt as to the action they should take,
they should seek their own financial advice from an independent
financial advisor. The affiliates of Virgin Group who will receive
ntl stock in the share and cash offer have agreed to: (a) limit
(with the restriction relaxing on a staged basis) the disposition
of their ntl shares over 18 months; and (b) certain limitations on
their conduct as ntl shareholders. They have also received certain
registration rights under the U.S. securities laws. Commenting on
the Offer, James Mooney, Executive Chairman of ntl, said: "We are
delighted to announce the recommended Offer and the brand licensing
with Virgin today, which not only delivers mobile capability to our
product bundle but also gives us access to a leading consumer
brand. It truly is a step-change transaction not only for ntl but
for the media sector as a whole in the UK. Central to today's
announcement is our strong belief that offering a quad-play
underpins true media convergence, and offering high quality
communications services will, we believe, appeal to existing
subscribers of the enlarged business as well as new customers.
There is a natural appeal for mobile, telephony, broadband and
television content and ntl is now truly unique in its mass market
product offering." Commenting on the Offer, Charles Gurassa,
Chairman of Virgin Mobile, said: "After careful consideration, the
Independent Directors of Virgin Mobile intend to recommend ntl's
Offer to shareholders. This Offer reflects the strong operational
and financial performance of Virgin Mobile and represents an
excellent opportunity for Virgin Mobile shareholders to realise the
significant increase in shareholder value since flotation. We
believe this Offer is in the best interests of Virgin Mobile's
shareholders, customers and employees." Goldman Sachs & Co.
acted as financial advisor to ntl, and provided a fairness opinion
as to the consideration in the Offer to the ntl board. Morgan
Stanley & Co. Limited acted as financial advisor to Virgin
Mobile. Fried Frank Harris Shriver & Jacobson LLP and Ashurst
acted as counsel to ntl. Allen & Overy LLP acted as counsel to
the Independent Board of Virgin Mobile. Herbert Smith LLP acted as
counsel to Virgin Group Investments Limited. A conference call and
webcast for analysts and investors regarding the Offer will be held
today at 2 p.m. UK time/ 9 a.m. Eastern Standard Time (UK: +44 20
7365 8426, US: +1 617 597 5341, participant code: ntl). The
presentation can also be accessed live via webcast on ntl's
website, www.ntl.com/investors. The teleconference replay will be
available for one week beginning approximately two hours after the
end of the call and will be available until Tuesday, 11 April 2006.
The dial-in replay number for the US is: +1 617 801 6888 and the
international dial-in replay number is: +44 (0) 207 365 8427, pass
code: 98450630. Goldman Sachs International, which is authorised
and regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for ntl and the Cash Offeror and
no one else in connection with the Offer and will not be
responsible to anyone other than ntl and the Cash Offeror for
providing the protections afforded to its customers or for
providing advice in relation to the Offer or any matter or
arrangement referred to herein. Morgan Stanley & Co. Limited is
acting exclusively for Virgin Mobile and no one else in connection
with the Offer and will not be responsible to anyone other than
Virgin Mobile for providing the protections afforded to its clients
or for providing advice in relation to the Offer or any matter or
arrangement referred to herein. Investec Bank (UK) Limited is
acting exclusively for Virgin Mobile and no one else in connection
with the Offer and will not be responsible to anyone other than
Virgin Mobile for providing the protections afforded to its clients
or for providing advice in relation to the Offer or any matter or
arrangement referred to herein. JP Morgan Cazenove is acting
exclusively for Virgin Mobile and no one else in connection with
the Offer and will not be responsible to anyone other than Virgin
Mobile for providing the protections afforded to its clients or for
providing advice in relation to the Offer or any matter or
arrangement referred to herein. Further Information on the Offer
The availability of the Offer to Virgin Mobile Shareholders who are
not resident in the United Kingdom and the United States may be
affected by the laws of relevant jurisdictions. Virgin Mobile
Shareholders who are not resident in the United Kingdom or the
United States will need to inform themselves about and observe any
applicable requirements. Any securities that are offered pursuant
to the Offer described in this announcement have not been and will
not be registered under the applicable securities laws of
Australia, Canada or Japan. Accordingly, any such securities may
not be offered, sold or delivered, directly or indirectly, in or
into Australia, Canada or Japan except pursuant to exemptions from
applicable requirements of such jurisdictions. The Offer will be
subject to the applicable rules and regulations of the UKLA, the
London Stock Exchange and the City Code. In addition, the Offer
will be subject to the applicable requirements of the United States
federal and state securities laws and the applicable rules and
regulations of NASDAQ (except to the extent exempt from such
requirements). Virgin Mobile Shareholders should read any
prospectus that may be filed by ntl with the SEC, because any such
prospectus will contain important information. Investors may obtain
a free copy of any prospectus, if and when it becomes available,
and other documents filed by ntl with the SEC, at the SEC's website
at http://www.sec.gov. Free copies of any prospectus, if and when
it becomes available, may be obtained by directing a request to ntl
Incorporated, 9098 Third Avenue, Suite 2863, New York, New York
10022, Attention: Investor Relations. If the Offer proceeds by way
of scheme of arrangement, however, it is anticipated that no
prospectus would be required because the transaction would be
exempt from registration under the US Securities Act of 1933, as
amended, pursuant to section 3(a)(10) thereof, in which case this
fact will be disclosed in the scheme document sent to all Virgin
Mobile Shareholders. This communication shall not constitute an
offer to sell or the solicitation of an offer to buy securities, or
the solicitation of any vote or approval, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction. City
Code Under the provisions of Rule 8.3 of the City Code, if any
person is, or becomes, "interested" (directly or indirectly) in 1
per cent. or more of any class of "relevant securities" of ntl, the
Cash Offeror or of Virgin Mobile, all "dealings" in any "relevant
securities" of that company (including by means of an option in
respect of, or a derivative referenced to, any such "relevant
securities") must be publicly disclosed by no later than 3.30 p.m.
(London time) on the Business Day following the date of the
relevant transaction. This requirement will continue until the date
on which the Offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the
"offer period" otherwise ends. If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of ntl,
the Cash Offeror or Virgin Mobile, they will be deemed to be a
single person for the purpose of Rule 8.3. Under the provisions of
Rule 8.1 of the City Code, all "dealings" in "relevant securities"
of ntl, the Cash Offeror or of Virgin Mobile by ntl, the Cash
Offeror or Virgin Mobile, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London
time) on the Business Day following the date of the relevant
transaction. A disclosure table, giving details of the companies in
whose "relevant securities" "dealings" should be disclosed, and the
number of such securities in issue, can be found on the Panel's
website at www.thetakeoverpanel.org.uk. "Interests in securities"
arise, in summary, when a person has long economic exposure,
whether conditional or absolute, to changes in price of securities.
In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of
any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can
also be found on the Panel's website. If you are in any doubt as to
whether or not you are required to disclose a "dealing" under Rule
8, you should consult the Panel. Forward Looking Statements Certain
statements in this document regarding the proposed transaction
between ntl and Virgin Mobile, the expected timetable for
completing the transaction, future financial and operating results,
benefits and synergies of the transaction, future opportunities for
the combined company and products and any other statements
regarding Virgin Mobile's or ntl's future expectations, beliefs,
goals or prospects constitute forward-looking statements as that
term is defined in the U.S. Private Securities Litigation Reform
Act of 1995. When used in this document, the words "believe",
"anticipate", "should", "intend", "plan", "will", "expects",
"estimates", "projects", "positioned", "strategy", and similar
expressions or statements that are not historical facts, in each
case as they relate to ntl and Virgin Mobile, the management of
either such company or the proposed transaction, are intended to
identify those expressions or statements as forward-looking
statements. In addition to the risks and uncertainties noted in
this document, there are certain factors, risks and uncertainties
that could cause actual results to differ materially from those
anticipated by some of the statements made, many of which are
beyond the control of ntl and Virgin Mobile. These include: (1) the
failure to obtain and retain expected synergies from the
integration of legacy ntl and legacy Telewest Global and the
proposed transaction, (2) rates of success in executing, managing
and integrating key acquisitions, including the integration of
legacy ntl and legacy Telewest Global and the proposed acquisition,
(3) the ability to achieve business plans for the combined company,
(4) the ability to manage and maintain key customer relationships,
(5) delays in obtaining, or adverse conditions contained in, any
regulatory or third-party approvals in connection with the proposed
acquisition, (6) availability and cost of capital, (7) the ability
to manage regulatory, tax and legal matters, and to resolve pending
matters within current estimates, (8) other similar factors, and
(9) the risk factors summarized and explained in the 2005 Form 10-K
for NTL Holdings Inc. (fka NTL Incorporated). For additional
information concerning factors that could cause actual results to
materially differ from those projected herein, please refer to ntl
and NTL Holdings Inc.'s most recent Form 10-K, 10-Q and 8-K
reports.
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