NTL Incorporated: -- NTL Incorporated ("ntl") and the Independent
Board of Virgin Mobile Holdings (UK) plc ("Virgin Mobile") are
pleased to announce that each of the pre-conditions set out in the
pre-conditional possible offer announcement made on 16 January 2006
has been satisfied or waived and that they have reached agreement
on the terms of a recommended cash offer to be made by ntl
Investment Holdings Limited (the "Cash Offeror"), a wholly owned
subsidiary of ntl, with a recommended share alternative offer to be
made by ntl, and a recommended share and cash alternative offer to
be made by ntl and the Cash Offeror, to acquire the entire issued
and to be issued share capital of Virgin Mobile (the "Offer"). The
Offer will be implemented by way of a scheme of arrangement under
section 425 of the Companies Act 1985, as amended. -- Pursuant to
the terms of the Offer, Virgin Mobile Shareholders can elect for:
(1) the Cash Offer of 372 pence in cash per Scheme Share held; or
(2) the Share Offer of 0.23245 ntl Shares per Scheme Share held,
valued at 389 pence per Scheme Share based on ntl's closing price
and the US$/GBP exchange rate at 3 April 2006; or (3) the Share and
Cash Offer by ntl and the Cash Offeror of 0.18596 ntl Shares and 67
pence in cash per Scheme Share held, valued at 311 pence per Scheme
Share based on ntl's closing price and the US$/GBP exchange rate at
3 April 2006 plus 67 pence in cash. -- The above terms have been
restated from those set out in ntl's announcement of a potential
offer for Virgin Mobile on 16 January 2006 as a result of the
subsequent closing of the merger of ntl and Telewest and the
consequent change in the identity of the ultimate parent company of
the ntl Group. This has required the number of ntl shares to be
offered for each Virgin Mobile Share under the Share Offer and the
Share and Cash Offer to be adjusted as set out in this
announcement. -- The Cash Offer values the existing issued share
capital of Virgin Mobile at approximately GBP 962.4 million. -- The
Cash Offer represents a premium of 19.6 per cent. to the Virgin
Mobile Share price on 2 December 2005, the last business day prior
to the commencement of the offer period; premia of 18.9 per cent.,
26.2 per cent. and 47.9 per cent. to the average Virgin Mobile
Share price over the one, three and twelve month periods prior to 5
December 2005, respectively; and a 86.0 per cent. premium to Virgin
Mobile's IPO offer price on 21 July 2004 when it was listed on the
London Stock Exchange. -- ntl has entered into a 30-year exclusive
brand licence with Virgin Enterprises Limited for the use of the
Virgin brand for ntl's consumer business. -- Closely following the
merger of ntl and Telewest to create the UK's leading triple-play
cable 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 that the combination with Virgin Mobile and the
re-branding of its combined consumer operations with the Virgin
brand will deliver wide-ranging strategic and financial benefits to
shareholders. In particular, ntl believes that the transactions
will: -0- *T -- 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 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; and -- provide potential for revenue synergies by: --
increasing penetration and reducing customer churn by providing an
appealing product suite under the Virgin brand; and -- 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 -- ntl
believes that the Offer will not materially affect its current
leverage. Other potential benefits anticipated include savings on
some of the re-branding costs it may have incurred had it
re-branded 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 Independent Board, who have been so advised by Morgan
Stanley & Co. Limited, consider the terms of the Cash Offer,
the Share Offer and the Share and Cash 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 has
indicated to ntl that it intends unanimously to recommend that
Virgin Mobile Shareholders vote in favour of the Scheme at the
appropriate meetings, as the Independent Directors have undertaken
to do in respect of all their own beneficial holdings of 1,338,534
Virgin Mobile Shares, representing as at the date of this
announcement, in aggregate, approximately 0.52 per cent. of the
existing issued share capital of Virgin Mobile. -- Virgin Mobile
Shareholders considering making an election for the Share Offer or
for the Share and Cash Offer are referred to the investment
considerations which will be set out in the Scheme Document. The
decision as to whether Virgin Mobile Shareholders make an election
for the Share Offer or for the Share and Cash Offer 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 adviser.
-- ntl and the Cash Offeror have received irrevocable undertakings
to vote in favour of a scheme of arrangement to implement the Offer
from Virgin Mobile Shareholders representing approximately 72.0 per
cent. of the existing issued share capital of Virgin Mobile. The
Virgin Group which, taken together, holds approximately 71.2 per
cent. of the existing issued share capital of Virgin Mobile, has
undertaken, irrespective of whether any higher competing bid is
made, to vote in favour of a scheme of arrangement to implement the
Offer and to elect in full for the Cash and Share Offer. 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 an 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." 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,
participant code: 98450630. A press conference will be held today
at 12 p.m. UK time at the offices of Buchanan Communications, 45
Moorfields, EC2Y 9AE. This summary should be read in conjunction
with the full text of the attached announcement. The Offer will be
subject to the conditions set out in Appendix I to this
announcement and the full conditions and further terms which will
be set out in the Scheme Document expected to be issued in due
course. Appendix II contains the sources and bases of information
used in this announcement. Appendix III contains further details on
the Implementation Agreement. Appendix IV contains the definitions
of certain expressions used in this announcement. 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's and NTL Holdings Inc.'s most recent Form 10-K, 10-Q and 8-K
reports. RECOMMENDED OFFERS BY NTL FOR VIRGIN MOBILE 1.
Introduction NTL Incorporated ("ntl") and the Independent Board of
Virgin Mobile Holdings (UK) plc ("Virgin Mobile") are pleased to
announce that each of the pre-conditions set out in the
pre-conditional possible offer announcement made on 16 January 2006
has been satisfied or waived and that they have reached agreement
on the terms of a recommended cash offer to be made by ntl
Investment Holdings Limited (the "Cash Offeror"), a wholly owned
subsidiary of ntl, with a recommended share alternative offer to be
made by ntl, and a recommended share and cash alternative offer to
be made by ntl and the Cash Offeror, to acquire the entire issued
and to be issued share capital of Virgin Mobile. The Offer will be
implemented by way of a scheme of arrangement under section 425 of
the Companies Act 1985, as amended. 2. Outline Terms and Conditions
of the Offer Under the Offer, which is subject to the conditions
referred to in paragraph 11 and set out in Appendix I to this
announcement, and subject to the further terms and conditions to be
set out in the Scheme Document, Scheme Shareholders will be able to
elect to accept the following alternative offers: -0- *T (a) Under
the Cash Offer: for each Scheme Share held 372p in cash (b) Under
the Share Offer: for each Scheme Share held 0.23245 ntl Shares (c)
Under the Share and Cash Offer: for each Scheme Share held 0.18596
ntl Shares plus 67p in cash *T The above terms have been restated
from those set out in ntl 's announcement of a potential offer for
Virgin Mobile on 16 January 2006 as a result of the subsequent
closing of the merger of ntl and Telewest and the consequent change
in the identity of the ultimate parent company of the ntl Group.
This has required the number of ntl shares to be offered for each
Virgin Mobile Share under the Share Offer and the Share and Cash
Offer to be adjusted as set out in this announcement. 3. The Cash
Offer The Cash Offer represents a premium of 19.6 per cent. to the
Virgin Mobile Share price on 2 December 2005, the last business day
prior to the commencement of the offer period; premia of 18.9 per
cent., 26.2 per cent. and 47.9 per cent. to the average Virgin
Mobile Share price over the one, three and twelve month periods
prior to 5 December 2005, respectively; and a 86.0 per cent.
premium to Virgin Mobile's IPO offer price on 21 July 2004 when it
was listed on the London Stock Exchange. The Cash Offer values the
entire issued share capital of Virgin Mobile at approximately GBP
962.4 million. 4. The Share Offer As an alternative offer to the
Cash Offer, Scheme Shareholders (other than certain Overseas
Shareholders) may elect to receive ntl Shares to be offered by ntl,
on the basis of 0.23245 ntl Shares for each Scheme Share held. ntl
Shares are quoted and tradable on the NASDAQ National Market.
Applications will be made for the new ntl Shares to be quoted on
the NASDAQ National Market. The Share Offer is valued at 389 pence
per Scheme Share based on ntl's closing price and the US$/GBP
exchange rate at 3 April 2006. 5. The Share and Cash Offer As an
alternative to both the Cash Offer and the Share Offer, ntl and the
Cash Offeror are also making the Share and Cash Offer, which will
enable Scheme Shareholders (other than certain Overseas
Shareholders) to elect to receive ntl Shares and cash, to be
offered by ntl and the Cash Offeror on the basis of 0.18596 ntl
Shares and 67 pence in cash for each Scheme Share held. ntl Shares
are quoted and tradable on the NASDAQ National Market. Applications
will be made for the new ntl Shares to be quoted on the NASDAQ
National Market. The Share and Cash Offer is valued at 311 pence
per Scheme Share based on ntl's closing price and the US$/GBP
exchange rate at 3 April 2006 plus 67 pence in cash. 6. Irrevocable
undertakings to accept the Offer In aggregate, ntl and the Cash
Offeror have received irrevocable undertakings to vote in favour of
the Scheme (or accept the Offer, if it is restructured as a
Takeover Offer) from Virgin Mobile Shareholders representing
approximately 72.0 per cent. of the existing issued capital of
Virgin Mobile. The Virgin Group which, taken together, holds Virgin
Mobile Shares representing approximately 71.2 per cent. of the
existing issued ordinary share capital of Virgin Mobile, has
irrevocably undertaken, irrespective of whether any higher
competing bid is made, to vote its holding in favour of the Scheme
or to accept a Takeover Offer (in the event of the Offer being
restructured as a Takeover Offer). In the event that the Offer is
restructured as a Takeover Offer, ntl has agreed with Virgin that
such Takeover Offer will be on identical terms save always that
such Takeover Offer will be conditional on receiving at least 70
per cent. acceptances. Virgin has elected to accept the Share and
Cash Offer in respect of all its Scheme Shares. The irrevocable
undertakings received from the Independent Board are in respect of
their (and their connected persons') respective entire holdings of
Virgin Mobile Shares, amounting in aggregate to 1,338,534 Virgin
Mobile Shares, representing approximately 0.52 per cent. of Virgin
Mobile's existing issued ordinary share capital. 7. Brand Licence
ntl and Virgin Enterprises have also entered into a trade mark
licence agreement (the "Brand Licence"), licensing to ntl the use
of certain Virgin trade marks within the United Kingdom and
Ireland. The Brand Licence is an exclusive licence, covering a
number of aspects of ntl's consumer business, including the
provision of communications services (such as internet, television,
and fixed line telephony), the acquisition and branding of sports,
movie and other premium television content, the acquisition and
exploitation of sports media rights, and the branding and sale of
related communications equipment (such as set-top boxes and cable
modems). If ntl acquires Virgin Mobile, the Brand Licence will also
replace the existing brand licensing arrangements between Virgin
Mobile and Virgin. The Brand Licence also permits ntl to rename its
ultimate public holding company with a name that includes the
Virgin name. The Brand Licence is for a 30 year period, although
ntl may terminate it at the end of the tenth year of that period on
one year's notice. The Brand Licence is subject to early
termination by ntl in certain circumstances, including (subject to
the making of certain payments) on a change of control of ntl.
Under the Brand Licence, ntl will pay Virgin Enterprises a royalty
of 0.25 per cent. of relevant consumer revenues (which would have
been approximately GBP 9 million based on 2005 revenues (including
Virgin.net and Virgin Mobile)), which royalty is subject to a
minimum annual payment of GBP 8.5 million. ntl expects to commence
the proposed re-branding within 12 months of the Brand Licence
becoming unconditional. In connection with the Brand Licence,
Virgin Enterprises will have the right to propose a nominee to
serve as a director of ntl, and will also have the right to
nominate a senior marketing executive (reporting to the Chief
Executive Officer, Chief Operating Officer, or senior person in
charge of ntl's consumer division) as a ntl employee. In addition,
Sir Richard Branson has also agreed to support ntl's promotional
activities. The Brand Licence is conditional upon the passing of an
ordinary resolution of the Independent Virgin Mobile Shareholders
(which requires a vote, to be held on a poll, in favour, of more
than 50 per cent. of the votes cast by Independent Virgin Mobile
Shareholders) to approve the Brand Licence. The Independent Board
intends unanimously to recommend that the Independent Virgin Mobile
Shareholders vote in favour of the resolution to approve the Brand
Licence. The terms of the Brand Licence are considered by Morgan
Stanley, Virgin Mobile's financial adviser, to represent an arm's
length commercially negotiated agreement and therefore are
considered to be fair and reasonable. In forming this view, Morgan
Stanley has taken into account the commercial assessments of the
Independent Board. Further details of the Brand Licence will be set
out in the Scheme Document. 8. Background to and reasons for the
Offer Closely following the merger of ntl and Telewest to create
the UK's leading triple-play cable provider, ntl's combination with
Virgin Mobile together with the proposed re-branding of its
combined consumer business with the Virgin brand represents an
important milestone in ntl's history. ntl believes that the
combination and re-branding will deliver wide-ranging strategic and
financial benefits to its shareholders. It enhances ntl as a scale
competitor in the UK telecommunications industry, enabling it to
become the first market participant offering an integrated
quad-play product suite, combining ntl's network, products and
triple-play experience together with Virgin Mobile's national
mobile business, creating a national communications and
entertainment company. Furthermore, the re-branding of ntl's
consumer business with the Virgin brand will bring Virgin's strong
brand into more than 5.1 million UK homes and, ntl believes, will
provide strong consumer appeal for a wide range of high quality
communications services available from a single provider under a
single consumer champion brand. Strengthening of ntl's
competitiveness The competitive landscape in European and UK
telecommunications has recently been undergoing substantial change,
with the recent consolidation of various market participants and
the convergence of telecommunications platforms and technologies.
The recent merger of ntl and Telewest provides ntl with competitive
scale and an access network passing more than half of UK homes,
plus a strong platform on which to base brand and product
extension. ntl believes that the mobile product of Virgin Mobile
and the Virgin brand would enable ntl to extend its portfolio to
compete more effectively with the large incumbents. Following the
merger between ntl and Telewest, ntl is the largest provider of
consumer broadband, the second largest provider of fixed telephony,
the second largest provider of pay TV and the third largest
provider of multi-channel TV, and, after the acquisition of Virgin
Mobile, would be the fifth largest provider of mobile telephony (in
each case, by number of subscribers). Furthermore, the extension of
ntl's product suite to include mobility will, ntl believes, provide
a strong platform for the innovation and development of converged
products, such as converged fixed and mobile telephony devices, and
video and voice services. Brand with strong consumer appeal ntl
believes that the Virgin brand would bring it a strong consumer
appeal, positioning and customer focus to a quad-play offering. It
would allow ntl to utilise Virgin's brand expertise and consumer
focus and should help increase customer loyalty and appeal. The
Virgin brand is the most admired brand in the UK (HPI Research
2005) and Virgin is the 27th most respected company in the world
(FT 2005) (in each case, as at the time of the relevant surveys).
First quad-play in the UK provides growth prospects ntl believes
that, following a combination with Virgin Mobile, it will be able
to extend its expertise in bundling and cross-selling
communications products to mobile telephony. It would create the
UK's first communications quad-play proposition. ntl's customer
base of over 5.1 million cable homes would be enhanced by Virgin
Mobile's more than 4.3 million active mobile subscribers. In
aggregate, the combined ntl and Virgin Mobile group would have 14.6
million RGUs (based on ntl and Telewest RGUs and Virgin Mobile
active subscribers as reported as at 31 December 2005). The
bundling of four communications products into one integrated
offering to ntl's and Virgin Mobile's customers should create a
strong competitive proposition, enabling ntl to deliver greater
value for money to customers. Significant value creation
opportunities ntl believes that a combination with Virgin Mobile
would create the potential for revenue synergies by: -- increasing
penetration and reducing customer churn by providing an appealing
product suite under the Virgin brand; and -- increasing ARPU
through the effective cross-selling of mobile services into
customer homes serviced by ntl, and triple-play services to Virgin
Mobile subscribers. Financial impact on ntl As referred to above,
ntl expects to generate certain revenue synergies over the
medium-term. Other potential benefits anticipated include the
savings that ntl believes would be derived from the re-branding of
all of ntl's consumer operations with the Virgin brand. Pursuant to
the Brand Licence, ntl would have the ability to access one of the
most powerful and customer-friendly brands in the UK, without some
of the re-branding costs it may have incurred had it re-branded
with a new brand. ntl also expects to benefit from Virgin Mobile's
high street presence (which includes over 100 "stores within
stores" in Virgin Megastores and WH Smith stores, through which it
intends to sell other ntl products). In addition, ntl plans to
consolidate Virgin Mobile into its group for UK corporation tax
purposes, enabling it to use certain existing capital allowances to
offset Virgin Mobile taxable income. Combination with Virgin Mobile
The ongoing process of integrating ntl's legacy business with the
business of Telewest was designed to enable ntl also to absorb
Virgin Mobile, were it be to acquired. In the immediate future, ntl
does not intend fully to integrate Virgin Mobile into ntl's
operations. ntl management's priority would continue to be the
integration of ntl's legacy cable businesses operations with those
of Telewest, and the exploitation of the benefits of the merger of
ntl and Telewest. It is intended that Virgin Mobile management
would report to the Chief Operating Officer of ntl. T-Mobile
T-Mobile, Virgin Mobile's network provider, has indicated that it
is supportive of the Offer. 9. Background and reasons for the
Recommendation of the Offer Virgin Mobile listed on the London
Stock Exchange on 21 July 2004, four and a half years after
launching its customer offer. At the time of the IPO, Virgin Mobile
laid out its plan to grow the business. Since listing, Virgin
Mobile has delivered against this strategy, producing sector
leading revenue growth by: leveraging the Virgin Mobile brand;
maintaining a differentiated approach to market through innovation;
and having the most satisfied customers in the sector. Virgin
Mobile's robust operational and financial results have been
reflected in the strong share price performance since IPO. On 5
December 2005 the Virgin Mobile Board confirmed that it had
received an approach from ntl regarding a possible offer for Virgin
Mobile. The Virgin Group representative on the Virgin Mobile Board
absented himself from the Virgin Mobile Board, and further
deliberations continued among the Independent Board members. After
careful consideration, the Independent Board determined that ntl's
potential cash offer of 323p materially undervalued Virgin Mobile
and unanimously rejected this proposal. In early January 2006 ntl
re-approached the Independent Board. After detailed negotiations,
the terms of a revised potential offer were finalised. In a joint
announcement on 16 January 2006, Virgin Mobile and ntl notified the
market of discussions in respect of a potential cash offer of 372p,
with share alternative offers. These discussions have resulted in a
firm intention to make the Offer now being announced. The
Independent Board believes that the revised Offer from ntl fairly
reflects the value of Virgin Mobile and the future potential of the
business, and accordingly the Independent Board intends unanimously
to recommend this Offer. 10. Financing the Offer The transaction
will be financed by a combination of cash and ntl Shares. If all
Independent Virgin Mobile Shareholders accept the Cash Offer, ntl
will require approximately GBP 290.5 million to satisfy acceptances
of the Cash Offer (assuming that all holders of options under the
Virgin Mobile Share Option Schemes receive cash consideration), and
approximately GBP 123.4 million to satisfy full acceptance of the
cash element of the Share and Cash Offer by Virgin Group in respect
of its approximately 71.2 per cent. shareholding of the current
issued share capital of Virgin Mobile. This would result in a total
cash consideration of approximately GBP 414.0 million. To satisfy
acceptance of the share element of the Share and Cash Offer by
Virgin, ntl will also issue approximately 34.3 million ntl Shares
to the Virgin Group. As a result, on a successful completion of the
Offer, Virgin Group will own approximately 10.1 to 10.6 per cent.
of then current issued share capital of ntl, depending on the
elections made by Independent Virgin Mobile Shareholders. ntl will
also refinance the existing Virgin Mobile indebtedness, which was
approximately GBP 192.7 million as at 30 September 2005. ntl
believes that the Offer will not materially affect its current
leverage. The cash consideration will be financed by a combination
of existing cash and incremental GBP 475 million financing
commitments from the existing ntl banking syndicate (comprised of
an additional GBP 175 million of borrowings under the 5-year
amortizing term loan facility entered into in connection with the
acquisition of Telewest, and a GBP 300 million 6 1/2-year bullet
repayment facility). Following completion on 3 March 2006 of the
merger of ntl and Telewest, on 3 March 2006 Standard & Poors
confirmed its previously stated credit rating for ntl, being a B+
corporate credit rating with positive outlook. Standard & Poors
also stated on that date that this confirmation also encompasses
its assessment of the anticipated acquisition of Virgin Mobile by
ntl, which it considered to be neutral for the combined company's
credit profile in the short term. On 27 March 2006 Moody's upgraded
ntl's corporate family rating from B1 to Ba3 with stable outlook.
Moody's stated that, whilst it expected the integration of ntl and
Telewest to pose significant organisational challenges, it
recognised the potential benefits that could result from an
acquisition of Virgin Mobile, in terms of increased customer reach
and increased product offering, as well as the use of the Virgin
brand. 11. Structure of the Proposals Introduction The Scheme
involves applications by Virgin Mobile to the Court to sanction the
Scheme and then to confirm the cancellation of the Scheme Shares,
in consideration for which Scheme Shareholders on the register of
members at the Scheme Record Time will receive cash, ntl Shares or
ntl Shares and cash, depending on their elections on the basis set
out in paragraphs 2 to 5 above. The cancellation and the subsequent
issue of new Virgin Mobile shares to members of the ntl Group
provided for in the Scheme will result in Virgin Mobile becoming a
wholly-owned subsidiary company in the ntl Group. The Meetings
Before the Court's approval can be sought, the Scheme of
Arrangement will require approval by Scheme Shareholders at a Court
Meeting and the passing of a special resolution by Virgin Mobile
Shareholders to implement the Scheme at an Extraordinary General
Meeting. In addition, the Scheme is conditional upon the approval
of the Brand Licence by a majority of the Independent Virgin Mobile
Shareholders who vote for the purposes Rule 16 of the City Code.
The Court Meeting will be held at the direction of the Court to
seek the approval of the Scheme Shareholders to the Scheme. The
approval required at the Court Meeting is a majority in number of
the Scheme Shareholders who vote, representing three fourths or
more in value of the votes cast, either in person or by proxy, at
the Court Meeting. In addition, an Extraordinary General Meeting
will be held for the purpose of considering and, if thought fit,
passing a special resolution (which requires a vote in favour of
not less than 75 per cent. of the votes cast) to approve: (i) the
Scheme; (ii) the reduction of capital and the issue of new Virgin
Mobile Shares to members of the ntl Group provided for in the
Scheme; and (iii) amendments to the articles of association of
Virgin Mobile (such changes to be conditional on the Scheme
becoming effective) in accordance with the Scheme and as described
below. The Extraordinary General Meeting will also consider, and if
thought fit, pass an ordinary resolution of the Independent Virgin
Mobile Shareholders (which requires a vote, to be held on a poll,
in favour, of more than 50 per cent. of the votes cast by
Independent Virgin Mobile Shareholders) to approve the Brand
Licence. Conditions to the Offer The Conditions to the Offer are
set out in Appendix I to this document. As currently structured,
the Offer is conditional, inter alia, upon: -- the Scheme becoming
effective by not later than 15 August 2006 or such later date as
Virgin Mobile, ntl and the Cash Offeror may agree in writing (and,
if appropriate, the Court may approve) failing which the Scheme
will lapse; -- the approval by a majority in number representing
three fourths or more in value of the holders of Scheme Shares,
present and voting, either in person or by proxy, at the Court
Meeting; -- the passing of the special (and any other) resolution
required to implement the Scheme as set out in the notice of
Extraordinary General Meeting at the Extraordinary General Meeting;
-- the passing of the ordinary resolution by the Independent Virgin
Mobile Shareholders to approve the Brand Licence. Approval of the
Brand Licence is required by the Panel and the resolution will be
passed if a simple majority of the Independent Virgin Mobile
Shareholders voting, in person or by proxy, on a poll, vote in
favour of it; -- the sanction of the Scheme (without modification
or with modification(s) agreed by Virgin Mobile and ntl) and the
subsequent confirmation of the reduction of capital involved
therein, in each case, by the Court and an office copy of the Court
order and the minute of such reduction attached thereto being
delivered for registration to the Registrar of Companies of England
and Wales and, in relation to the reduction of capital, being
registered by him; and -- the Conditions which are not otherwise
identified above being satisfied or waived. Once the necessary
approvals from Virgin Mobile Shareholders have been obtained and
the other Conditions have been satisfied or (where applicable)
waived, the Scheme and associated reduction of capital will become
effective following sanction by the Court upon delivery to and, in
the case of the associated reduction of capital, registration of
the Court Order by the Registrar of Companies in England and Wales.
Once effective, the Scheme will be binding on all Scheme
Shareholders, including those who did not vote, or who voted
against it, at the Meetings or who could not be traced. It is also
proposed that, following the Effective Date, Virgin Mobile's
listing on the Official List will be cancelled and Virgin Mobile
will be re-registered as a private company under the relevant
provisions of the Companies Act. 12. Anticipated timetable Virgin
Mobile anticipates that it will post the Scheme Document within the
next 28 days; that the Court Meeting and Extraordinary General
Meeting will take place during May 2006; and that, subject to the
Scheme becoming unconditional and effective, the Effective Date
will occur in late June 2006. 13. Management and employees ntl
confirms that it intends to safeguard the existing contractual and
statutory employment rights, including pension rights, of the
existing employees of the Virgin Mobile Group. 14. Virgin Mobile
Share Option Schemes At the same time as, or as soon as practicable
following, the publication of the Scheme Document, explanatory
letters will be sent to the participants in the Virgin Mobile Share
Option Schemes explaining the effect of the Scheme on them and,
where applicable, their right to exercise share options or to
receive shares under awards. It is proposed to amend the articles
of association of Virgin Mobile at the Extraordinary General
Meeting to provide that, if the Scheme becomes effective, any
Virgin Mobile Share issued after the Hearing Date will
automatically (and immediately following issue) be transferred to a
member of the ntl Group in exchange for the Offer Price in cash on
the same basis as under the Scheme. Consequently, participants in
the Virgin Mobile Share Option Schemes who exercise any options or
receive shares under awards after the Scheme becomes effective will
receive cash consideration in the same manner as Scheme
Shareholders who elect for the Cash Offer under the Scheme. Further
details of these proposals will be set out in the letters to the
participants in the Virgin Mobile Share Option Schemes. 15.
Information on ntl ntl is the UK's second largest communications
company and leading triple play service provider with a cable
footprint covering more than 50 per cent. of UK households.
Following its merger with Telewest, ntl has more than 5.1 million
residential customers and is the largest provider of residential
broadband services in the UK with 2.8 million subscribers, the
second largest pay TV provider (and the third largest provider of
multi-channel TV) with 3.3 million subscribers and also the second
largest fixed telephony provider with 4.3 million subscribers.
ntl's services are delivered through its wholly-owned local access
communications network passing approximately 12.4 million homes in
the UK. The design and capability of its network provides ntl with
the ability to offer triple-play bundled services and a broad
portfolio of reliable, competitive communications solutions to
business customers. ntl provides services to two categories of
customers (residential customers and business customers) as
follows: -- Consumer: internet, telephone and cable television
services to residential customers in the UK; and -- Business:
internet, data and voice services to large businesses, public
sector organisations and small and medium-sized enterprises, or
SMEs, communications transport services, and wholesale internet
access solutions to internet service providers, or ISPs. ntl's
combined legacy ntl and Telewest local access networks, which do
not overlap, provide a strong platform allowing for product
differentiation and innovation and the delivery of unique packages
of service offerings. ntl now has the benefit of a much larger
cable network (following its merger with Telewest) and, together
with Telewest's content division, a strong position in the
multi-channel TV marketplace. 16. Information on Virgin Mobile
Virgin Mobile is the UK's largest mobile virtual network operator
("MVNO") with more than 4.3 million customers. Virgin Mobile
launched its operations in November 1999 and provides a broad range
of mobile communications services to its customers. At launch,
Virgin Mobile's addressable market encompassed all of the pre-pay
market and in May 2005 it expanded to include the consumer contract
market with the launch of Virgin Mobile Pay Monthly. In a short
space of time, Virgin Mobile has built up a distribution network of
over 16,000 outlets connecting customers and over 100,000 outlets
selling airtime. It utilises the value of the Virgin brand by
putting dedicated Virgin Mobile "stores within stores" inside over
100 Virgin Megastores and WH Smith stores nationally. Virgin
Mobile's successful business philosophy is centred around five key
strengths: a strong brand; a low capital investment business model;
a differentiated approach to the market; an award-winning customer
service; and a strong management team. Virgin Mobile benefits from
the strength of the Virgin brand that has assisted the growth and
level of Virgin Mobile's brand recognition within the UK. The
Virgin Mobile brand is reflected in the company's entrepreneurial
culture, customer proposition and differentiated approach to the
market. Virgin Mobile believes it has good value tariffs which are
easy to understand and a wide range of the latest handsets, and
that it rewards customer loyalty. As an MVNO, Virgin Mobile has
modest capital investment requirements when compared to its peers,
which results in exceptional returns on capital. Capital
investments are primarily made to support growth, operational
efficiencies and the customer proposition. Virgin Mobile currently
operates under its non-exclusive, minimum ten year term
Telecommunications Supply Agreement with T-Mobile, signed in
January 2004, and has recently entered into an agreement with BT
Movio, a division of BT plc, to offer mobile TV to customers using
the UK's Digital One DAB broadcast network. Virgin Mobile
differentiates its approach to the market by challenging market
convention, being customer focused and offering a simple and
compelling customer proposition. Its products and brand are backed
up by the best customer service in the industry. It has won
numerous awards for its dedication to customer care, is
consistently highly rated in customer satisfaction surveys and has
rates of customer churn below the industry average. Since launch in
1999, Virgin Mobile has been led by strong management, consisting
of highly experienced individuals with proven track record. This
team was instrumental in developing and implementing a
customer-oriented business, which has delivered rapid growth and
strong financial results. Virgin Mobile's interim unaudited results
for the period to 30 September 2005 (prepared in accordance with
IFRS) were announced on 17 November 2005. These showed a turnover
for the period of GBP 274.6 million (2004: GBP 256.7 million),
service revenues of GBP 250.8 million (2004: GBP 230.7 million),
operating profit of GBP 45.5 million (2004: GBP 35.7 million),
EBITDA (excluding one-off items) of GBP 54.0 million (2004: GBP
55.6 million), and basic EPS of 10.8 pence (2004: 7.8 pence). Net
debt as at 30 September 2005 was GBP 192.7 million (2004: GBP 264.1
million). Under Virgin Mobile's current accounting policies,
subscriber acquisition costs ("SACs") for contract customers are
recognized over the length of the contract. If contract SACs had
been expensed in full upon connection, ntl estimates that operating
profit and EBITDA for the period to 30 September 2005 would have
been reduced by approximately GBP 16 million. For the 12 month
period to 30 September 2005, Virgin Mobile's turnover was GBP 539
million, EBITDA excluding one-off items (a Virgin Mobile non-GAAP
financial measure derived from financial statements prepared in
IFRS) was GBP 99 million, and purchase of fixed assets GBP 11
million (in each case, for the last twelve months to 30 September
2005, calculated by subtracting the reported results for the six
months to 30 September 2004 from the reported results for the year
to 31 March 2005 and adding the reported results for the six months
to 30 September 2005). Virgin Mobile's key performance indicators
for the three months to 31 December 2005 were announced on 1
February 2006. These showed Q3 service revenues up 20.3% year on
year (H1 FY06: 8.7%, excluding Ofcom termination rate cut - H1FY06:
17.9%), total active customers increased 12% to 4,346,000 (Q3 FY
05: 3,879,000), rising 12 month rolling ARPU of GBP 123 (H1 FY06:
GBP 121) and strong customer growth with 193,000 net active
additions (Q3 FY05: 276,000). 17. Interests in Virgin Mobile Shares
Save for the irrevocable undertakings referred to in paragraph 6
above, neither the Cash Offeror nor ntl nor any of their directors
nor, so far as the directors of the Cash Offeror or ntl are aware,
any person acting in concert with the Cash Offeror or ntl for the
purposes of the Offer, owns or controls or holds any option to
purchase, or has any arrangement in relation to Virgin Mobile
Shares or securities convertible or exchangeable into Virgin Mobile
Shares or options (including traded options) in respect of, or has
entered into any derivative referenced to, any such shares. For
these purposes, "arrangement" includes any indemnity or option
arrangement, any agreement or understanding, formal or informal, of
whatever nature, relating to Virgin Mobile Shares which may be an
inducement to deal or refrain from dealing in such shares. 18.
Inducement fee In the Implementation Agreement, Virgin Mobile has
agreed with the Cash Offeror and ntl that it will not enter into
any inducement fee arrangements with any person in connection with
an approach to Virgin Mobile or a proposal or offer to acquire
shares in the capital of Virgin Mobile. No inducement fee
arrangement has been agreed with the Cash Offeror or ntl. 19.
Implementation Agreement ntl, the Cash Offeror, and Virgin Mobile
have entered into an implementation agreement regarding the
implementation of the Scheme (or, if applicable, a Takeover Offer)
and the conduct of the business of Virgin Mobile in the period up
to the Effective Date (or, if applicable, the date on which the
Offer becomes or is declared unconditional in all respects). ntl
can terminate the Implementation Agreement if Virgin Mobile
breaches certain covenants contained in the Implementation
Agreement. Further details of the Implementation Agreement are set
out in Appendix III. 20. Investment Agreement In connection with
the possible issue of ntl Shares to members of the Virgin Group
pursuant to the Offer, a member of the Virgin Group and Sir Richard
Branson have entered into an investment agreement dated 3 April
2006, that will become effective on the Effective Date. The
Investment Agreement places restrictions on the extent to which the
relevant Virgin Group holders of ntl Shares will be able to dispose
of those ntl Shares during an 18 month period from the Effective
Date, with those restrictions relaxing on the following basis
during that period (cumulatively, but including any prior sales by
them of ntl Shares): (i) 12.5 per cent. of their initial holding
after three months; (ii) 25 per cent. of their initial holding
after six months; (iii) 37.5 per cent. of their initial holding
after nine months; (iv) 50 per cent. of their initial holding after
twelve months; (v) 75 per cent. of their initial holding after
fifteen months; (vi) 100 per cent. of their initial holding after
eighteen months (i.e. at this point their ntl Shares become freely
transferable). In addition, it places certain restrictions on the
conduct of those holders, and Sir Richard Branson, such that those
holders: (i) would not be permitted to acquire more than 15 per
cent., in aggregate, of ntl's Shares (subject to certain exceptions
and ntl's shareholder rights plan); (ii) would not be permitted to
sell any ntl Shares to any person or persons who would own, in
aggregate, 1 per cent. of ntl's entire issued share capital
following any such sale or sales; (iii) agree that they would
exercise their voting rights pro rata with the votes of other
holders of ntl Shares, or in support of any actions recommended by
the board of directors of ntl in respect of: any amendment of ntl's
articles or bylaws; any proposal that could facilitate a change of
control of ntl; or on any election of a director of ntl.
Notwithstanding that, those holders retain the right to vote
against a business combination transaction recommended by the board
of ntl, and to refuse to accept a recommended offer for their ntl
Shares; and (iv) are restricted from: offering, proposing or
seeking to enter into business combination transactions;
participating in the solicitation of proxies; proposing shareholder
proposals; publicly opposing recommendations by the board of
directors of ntl; and engaging in related discussions with third
parties, making related public announcements, or assisting other
persons to do the same, which restrictions all expire after ntl's
2008 annual stockholders' meeting has taken place. Furthermore, it
contains registration rights under the US Securities Exchange Act
of 1933, as amended, in favour of the above persons in respect of
their holdings of ntl Shares. The Investment Agreement is subject
to early termination by ntl in certain circumstances, including
(subject to the making of certain payments) on a change of control
of ntl. Further details of the Investment Agreement will be set out
in the Scheme Document. 21. Overseas Shareholders The availability
of the Offer to persons not resident in the United Kingdom and the
United States may be prohibited or affected by the laws of the
relevant jurisdictions. Such persons should inform themselves
about, and observe, any applicable requirements. 22. Recommendation
The Independent Board, who have been so advised by Morgan Stanley,
consider the terms of the Cash Offer, the Share Offer, and the
Share and Cash Offer, to be fair and reasonable. In providing
advice to the Independent Board, Morgan Stanley has taken into
account the commercial assessments of the Independent Board. The
Independent Board has indicated to ntl that it intends unanimously
to recommend that the Virgin Mobile Shareholders vote in favour of
the Scheme at the appropriate meetings, as the Independent
Directors have undertaken to do in respect of all their own
beneficial holdings of 1,338,534 Virgin Mobile Shares, representing
as at the date of this announcement, in aggregate, approximately
0.52 per cent of the existing issued share capital of Virgin
Mobile. Virgin Mobile Shareholders considering making an election
for the Share Offer or for the Share and Cash Offer are referred to
the investment considerations which will be set out in the Scheme
Document. The decision as to whether Virgin Mobile Shareholders
make an election for the Share Offer or for the Share and Cash
Offer 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 adviser. The Independent Board considers that
the terms of the Brand Licence represent an arm's length
commercially negotiated agreement and therefore are fair and
reasonable. Accordingly, the Independent Board has indicated to ntl
that it intends unanimously to recommend that the Independent
Virgin Shareholders vote in favour of the resolution to approve the
Brand Licence as they intend to do in respect of their own Virgin
Mobile Shares. 23. General The acquisition of Virgin Mobile may be
made by one or more new companies in addition to ntl, or in
substitution for the Cash Offeror at ntl's sole discretion. Details
of any such companies will be included in the Scheme Document.
References to the Cash Offeror in this announcement should be
construed accordingly. The Scheme Document, forms of election to
allow Virgin Mobile Shareholders to elect to receive either of the
Share Offer or the Share and Cash Offer and proxy forms for the
Meetings, will be sent to Virgin Mobile Shareholders in due course.
If Scheme Shareholders do not elect, or do not validly elect for
one of the Share Alternative Offers, they will be deemed for the
purposes of the Scheme to have elected to receive the Cash Offer.
Fractional entitlements to ntl Shares will not be allotted or
issued pursuant to the Share Offer or the Share and Cash Offer and
will be disregarded. ntl reserves the right to elect to implement
the Offer by making a Takeover Offer for the entire issued and to
be issued share capital of Virgin Mobile. Prior to a Takeover Offer
being made, the consent of the Panel will be required and such
alterations to the Offer will need to be made as are necessary for
the Takeover Offer to comply with the provisions of the City Code,
including those provisions relating to the cash confirmation
requirements of Rule 24.7. 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,
participant code: 98450630. A press conference will be held today
at 12 p.m. UK time at the offices of Buchanan Communications, 45
Moorfields, EC2Y 9AE. This summary should be read in conjunction
with the full text of the attached announcement. The Offer will be
subject to the conditions set out in Appendix I to this
announcement and the full conditions and further terms which will
be set out in the Scheme Document expected to be issued shortly.
Appendix II contains the sources and bases of information used in
this announcement. Appendix III contains further details on the
Implementation Agreement. Appendix IV contains the definitions of
certain expressions used in this announcement. 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 Incorporated 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 Incorporated and Virgin Mobile Holdings UK plc, 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's and NTL holdings Inc.'s
most recent Form 10-K, 10-Q and 8-K reports. APPENDIX I Conditions
and Further Terms of the Offer 1. Conditions of the Offer The Offer
will be subject to the conditions set out herein and to the further
terms and conditions set out in the Scheme Document. 1.1 The Offer,
if it is implemented by way of the Scheme, will be conditional upon
the Scheme becoming unconditional and effective, subject to the
City Code, by not later than 15 August 2006 or such later date as
ntl, the Cash Offeror, Virgin Mobile and the Court may agree in
writing. The Scheme will be conditional upon: (a) approval by a
majority in number representing three fourths or more in value of
the holders of Scheme Shares, present and voting, either in person
or by proxy, at the Court Meeting; (b) any resolution required to
implement the Scheme, amend Virgin Mobile's articles of
association, and set out in the notice of Extraordinary General
Meeting, being passed at the Extraordinary General Meeting; and (c)
the sanction of the Scheme (without modification or with
modification(s) agreed by Virgin Mobile and ntl) and the
confirmation of any reduction of capital involved therein by the
Court and an office copy of the Court order and the minute of such
reduction attached thereto being delivered for registration to the
Registrar of Companies of England and Wales and, in relation to the
reduction of capital, being registered by him. 1.2 The Offer will
also be subject to the Office of Fair Trading indicating in terms
satisfactory to the Cash Offeror or ntl that it does not intend to
refer the proposed acquisition of Virgin Mobile by the ntl Group to
the Competition Commission and, in the event that the Secretary of
State serves an intervention notice under section 42(2) of the
Enterprise Act 2002, the Office of Fair Trading indicating in terms
satisfactory to the Cash Offeror or ntl that the Secretary of State
does not intend to refer the proposed acquisition of Virgin Mobile
by the ntl Group to the Competition Commission and the expiry of a
period of four weeks from the date on which the reasoned decision
of the Office of Fair Trading or the Secretary of State, as the
case may be, was published, provided that the Registry of the
Competition Appeal Tribunal has confirmed that, as at 5.00 pm on
the final day of the four week period, no application under section
120 of the Enterprise Act 2002 has been made for review of the
decision. 1.3 The Offer will also be conditional on approval of the
Brand Licence by a simple majority of the Independent Virgin Mobile
Shareholders voting, in person or by proxy, on a poll. The Cash
Offeror and/or ntl reserves the right to waive condition 1.2 above
in whole or part. If ntl or a member of the ntl Group is required
by the Panel to make an offer for Virgin Mobile Shares under the
provisions of Rule 9 of the Code, ntl or the relevant member of the
ntl Group may make such alterations to the conditions as are
necessary to comply with the provisions of that Rule, including
(without limitation) an acceptance condition of 70 per cent. of the
Virgin Mobile Shares to which the Takeover Offer relates. If ntl or
a member of the ntl Group elects to implement the Offer by making a
Takeover Offer for Virgin Mobile instead of or in substitution for
the Scheme, ntl or the relevant member of the ntl Group may, with
the consent of the Panel, make such alterations to the conditions
as are necessary to comply with the provisions of the Code. The
Offer will lapse if the Offer is referred to the Competition
Commission before the Effective Date. The Offer and the Scheme will
be governed by English law. The City Code applies to the Offer. 2.
Certain further terms of the Offer (a) Virgin Mobile Shares will be
acquired by the appropriate members of the ntl Group fully paid and
free from all liens, equitable interests, charges, encumbrances and
other third party rights of any nature whatsoever and together with
all rights attaching to them, including the right to receive and
retain all dividends and distributions (if any) declared, made or
payable after the date of this announcement. (b) The Offer will be
on the terms and will be subject, inter alia, to the conditions
which are set out in paragraphs 1.1 to 1.3 of Appendix I and those
terms which will be set out in the Scheme Document and such further
terms as may be required to comply with the Listing Rules of the UK
Listing Authority, the obligations under the U.S. federal
securities laws and the regulations thereunder of the SEC and the
provisions of the City Code. APPENDIX II Bases of Calculation and
Sources of Information 1. The value placed by the Offer on the
existing issued share capital, and other statements made by
reference to the existing share capital, of Virgin Mobile are based
on 258,703,010 Virgin Mobile Shares in issue, being the number of
shares in issue publicly stated by Virgin Mobile on 29 March 2006.
2. With the consent of the Panel, the provisions of Rule 24.2(g)
have been applied as if the current offer period for Virgin Mobile
commenced on 5 December 2005, notwithstanding the fact that the
initial offer period ceased on 8 December 2005 and the current
offer period commenced on 9 December 2005. 3. Unless otherwise
stated, the financial information and other information on Virgin
Mobile included in this announcement has been extracted or derived,
without material adjustment, from the audited consolidated
financial statements, for the Virgin Mobile Group for the years
ended 31 March 2004 and 2005, and the interim unaudited
consolidated financial results for the Virgin Mobile Group for the
six months ended 30 September 2004 and 2005. 4. Unless otherwise
stated, the financial information and other information on
Telewest, the Cash Offeror and ntl included in this announcement
has been extracted or derived, without material adjustment, from
the audited consolidated financial statements for the ntl Group and
Telewest for the year ended 31 December 2004 and 2005. 5. Unless
otherwise stated, all historic share prices quoted for Virgin
Mobile Shares have been sourced from the Daily Official List and
represent closing middle market prices for Virgin Mobile Shares on
the relevant dates. 6. As at the close of business on 3 April 2006,
Virgin Mobile had in issue 258,703,010 ordinary shares of 10 pence
each. 7. As at the close of business on 3 April 2006, ntl had in
issue 288,115,064 shares of common stock of US$0.01 each. 8. As at
the close of business on 3 April 2006, the Cash Offeror had in
issue 121,006 ordinary shares of GBP 0.001 each. 9. The US$/GBP
exchange rate used in this announcement is the Federal Reserve Bank
of New York rate as at 12 p.m. New York time on 3 April 2006, being
US$1.7389:GBP 1. 10. The ntl Share price used in this announcement
is the closing price as at 3 April 2006, being US$29.12. APPENDIX
III Implementation Agreement Under the Implementation Agreement:
-0- *T (a) Virgin Mobile, ntl and the Cash Offeror have given each
other certain undertakings regarding implementation of the Scheme
(or, if applicable, a takeover offer); (b) Virgin Mobile, ntl and
the Cash Offeror have agreed to co-operate with each other towards
satisfaction of the Conditions; (c) Virgin Mobile has agreed to the
following provisions, breach of which will be regarded as material
and thereby giving ntl the right to terminate the Implementation
Agreement: (i) to carry on the business of Virgin Mobile in the
ordinary course and not undertake any material commitment or enter
into or amend any material contract otherwise than in the ordinary
course; (ii) not to amend or agree to amend the TSA other than
pursuant to the Amendment Agreement; (iii) not to solicit an
alternative offer for Virgin Mobile and to promptly inform ntl and
the Cash Offeror of any such approach by a third party; and (iv)
not to take any action which is prejudicial to the successful
outcome of the Scheme; and (d) Virgin Mobile has agreed that if the
Scheme does not become effective for any reason, including, for
example, if the requisite resolutions to approve the Scheme are not
passed or if the Court fails to sanction the Scheme, it will take
or cause to take all actions necessary to implement the Offer as a
Takeover Offer including providing Virgin Mobile's recommendation
to the implementation of the Offer as a Takeover Offer pursuant to
the note on Rules 35.1 and 35.2 of the City Code. *T APPENDIX IV
Definitions The following definitions apply throughout this
announcement unless the context otherwise requires: -0- *T
"Amendment Agreement" means the amendment agreement between Virgin
Mobile Telecoms Limited and T-Mobile (UK) Limited dated on or about
the date of this announcement in respect of the amendment of
certain provisions of the TSA; "ARPU" means average revenue per
user; "associated undertaking" has the meaning given to it in
Section 20 of Schedule 4A to the Companies Act; "Australia" means
the Commonwealth of Australia, its territories and possessions;
"Brand Licence" means the trade mark licence agreement in respect
of the Virgin brand executed by Virgin Enterprises and ntl on 3
April 2006; "Business Day" means a day (other than Saturday or
Sunday) on which banks are generally open for business in the City
of London; "Canada" means Canada, its provinces and territories and
all areas subject to its jurisdiction and any political
sub-division of such territories and areas; "Cash Offer" means the
recommended cash offer at the Offer Price made to Scheme
Shareholders by the Cash Offeror (or such other member of the ntl
Group who shall be specified); "City Code" means the City Code on
Takeovers and Mergers; "Closing Price" means the middle market
price of a Virgin Mobile Share at the close of business on the day
to which such price relates, derived from the Daily Official List
for that day; "Companies Act" means the Companies Act 1985 (as
amended); "Conditions" means the conditions of the Offer set out in
Appendix I to this Announcement and any other conditions which are
agreed in writing by the parties; "Court" means the High Court of
Justice in England and Wales; "Court Meeting" means the meeting of
the Scheme Shareholders (and any adjournment thereof) to be
convened by order of the Court pursuant to section 425 of the
Companies Act to consider and, if thought fit, approve the Scheme
(with or without amendment); "Court Order" means the order of the
Court sanctioning the Scheme under section 425 of the Companies Act
and confirming the reduction of share capital which forms part of
it under section 137 of the Companies Act; "Daily Official List"
means the daily official list of the London Stock Exchange;
"Effective Date" means the date on which the Scheme becomes
effective in accordance with its terms; "Extraordinary General
means the extraordinary general meeting (or Meeting" any
adjournment thereof) of the Virgin Mobile Shareholders to be
convened in connection with the Scheme, expected to be held as soon
as the preceding Court Meeting shall have been concluded or
adjourned; "Financial Services means the Financial Services
Authority of Authority" the UK in its capacity as the competent
authority for the purposes of Part VI of FSMA and in the exercise
of its functions in respect of admission to the Official List
otherwise than in accordance with Part VI of FSMA; "FSMA" means the
Financial Services and Markets Act 2000 (as amended); "Hearing"
means the hearing or hearings by the Court of the petition to
sanction the Scheme and/or confirm the associated reduction of
capital and/or grant the Court Order (as the case may be); "Hearing
Date" means the date of the commencement of the Hearing;
"Implementation means the implementation agreement between
Agreement" Virgin Mobile, the Cash Offeror and ntl dated 3 April
2006; "Independent Board" means the directors of Virgin Mobile
excluding Gordon McCallum, who is the representative of Virgin,
Virgin Mobile's majority shareholder and who has absented himself
from discussions in relation to the Offer; "Independent Virgin
means the Virgin Mobile Shareholders Mobile Shareholders" excluding
the Virgin Group; "Investment Agreement" means the investment
agreement between a member of the Virgin Group, Sir Richard
Branson, and ntl, dated 3 April 2006; "Listing Rules" means the
listing rules of the Financial Services Authority; "London Stock
Exchange" means London Stock Exchange plc; "Meetings" means the
Court Meeting and/or the Extraordinary General Meeting, as the case
may be; "Morgan Stanley" means Morgan Stanley & Co. Limited;
"NASDAQ National Market" means the national association of
securities dealers, automated quotation system national market;
"ntl Group" means ntl, its holding companies and its subsidiary
undertakings; "ntl Shares" means ntl common stock of $0.01 per
share which is quoted on Nasdaq; "new ntl Shares" means new ntl
Shares issued to Scheme Shareholders who elect to receive ntl
Shares pursuant to the Share Offer or the Share and Cash Offer;
"Offer" means the Cash Offer, the Share Offer, and the Share and
Cash Offer to acquire the Scheme Shares as detailed in this
Announcement and, where the context requires, any subsequent
revision, variation, extension or renewal thereof; "Offer Price"
means the cash offer price of 372 pence per Scheme Share; "Official
List" means the official list of the Financial Services Authority;
"Overseas Shareholders" means Virgin Mobile shareholders whose
registered addresses are outside the UK and the United States or
who are citizens or residents of countries other than the UK and
the United States; "GBP " means pounds sterling; "Panel" means The
Panel on Takeovers and Mergers; "quad-play" means fixed line
telephony, broadband internet, television and mobile telephony;
"RGUs" means revenue generating units; "Scheme Document" means the
document proposed to be despatched by Virgin Mobile to Virgin
Mobile Shareholders containing and setting out the terms and
conditions of the Offer and certain information about Virgin
Mobile, ntl and the Cash Offeror and containing the Scheme and
notices of the Meetings; "Scheme" or "Scheme of means the proposed
scheme of arrangement Arrangement" under section 425 of the
Companies Act between Virgin Mobile and the holders of Scheme
Shares, with or subject to any modification, addition or condition
approved or imposed by the Court; "Scheme Record Time" means the
time and date to be specified in the Scheme Document; "Scheme
Shareholders" means the holders of Scheme Shares; "Scheme Shares"
means Virgin Mobile Shares in issue on the date of this
announcement together with any further Virgin Mobile Shares: (a)
issued after the date of this announcement and prior to the Voting
Record Time; and (b) (if any) issued on or after the Voting Record
Time and prior to 6:00 p.m. on the day before the Hearing Date
either on terms that the original or any subsequent holders thereof
shall be bound by the Scheme or in respect of which the holders
thereof shall have agreed to be bound by the Scheme; "SEC" means
the U.S. Securities Exchange Commission; "Securities Act" means the
United States Securities Act of 1933 (as amended); "Share
Alternative means the Share and Cash Offer and/or the Offers" Share
Offer; "Share and Cash Offer" means the recommended offer of
0.18596 ntl Shares plus 67 pence in cash per Scheme Share held to
made by ntl and the Cash Offeror (or such other member(s) of the
ntl Group who shall be specified); "Share Offer" means the
recommended offer of 0.23245 ntl Shares per Scheme Share held to
made by ntl; "subsidiary" or having the meanings given to them by
the "subsidiary undertaking" Companies Act; "Takeover Offer" means
the implementation of the Offer by means of a takeover offer under
the City Code; "Telewest" means Telewest Global, Inc.; "T-Mobile"
means T-Mobile (UK) Limited; "triple-play" means fixed line
telephony, broadband internet, and television; "TSA" means the
telecommunications supply agreement between Virgin Mobile Telecoms
Limited and T-Mobile dated 29 January 2004; "UKLA" means the United
Kingdom Listing Authority; "United Kingdom" or "UK" means the
United Kingdom of Great Britain and Northern Ireland; "United
States" or "US" means the United States of America (including the
States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction; "US
Person" means a US person as defined in Regulation S under the
Securities Act; "US$" "USD" or "$" means United States dollars;
"Voting Record Time" means the time and date to be specified in the
Scheme Document; "Virgin Enterprises" means Virgin Enterprises
Limited; "Virgin Group" means Virgin Group Investments Limited and
its subsidiary undertakings and affiliates; "Virgin Mobile Board"
means the full board of directors of Virgin Mobile; "Virgin Mobile
Group" means Virgin Mobile and its subsidiary undertakings; "Virgin
Mobile Share means (i) the Discretionary Share Option Option
Schemes" Plan; (ii) the Share Incentive Plan; (iii) the Savings
Related Share Option Plan; (iv) the Performance Share Plan; and (v)
the Pre-IPO Plan; "Virgin Mobile means the holders of Virgin Mobile
Shares; Shareholders" and "Virgin Mobile Shares" means the ordinary
shares of 10p each in Virgin Mobile. *T
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