Virgin Mobil's proposed takeover by NTL

Résumé du document

NTL proposed a £871 m takeover of Virgin mobile but was rejected, then a second proposition was made at £961 m. On the 3rd of April they announced a total of $1.66 billion for Virgin Mobile. The negotiation will be ready to receive both cash and NTL shares in a deal. Virgin Mobile will have a choice of accepting cash or shares in NTL in exchange for their stake in the mobile company. Virgin mobile shareholder can choose between a cash offer or 0.23245 NTL shares per scheme share* held, a share offer of 372 pence and a share and cash offer by NTL and a cash offer of 0.18596 NTL share held. NTL will use the Virgin Brand to offer internet access, TV and fixed line and mobile telephone. NTL entered into a 30 year exclusive brand license limited for the use of the virgin brand for NTL consumer business.

Extraits

[...] Negotiators hope to maintain a positive climate. The bargaining climate doesn't really changes in the negotiation progresses. The problem is that each party may be tempted to take lightly or even refuse to discuss the other's pressing concerns. The most important is the preliminary discussion. Also, Schelling (1960) has pointed out that actor's capacity to make a legal contract, placing him in jeopardy for failing to honour a promise, contributes to the credibility of a promise” The condition for this negotiation Credibility: credibility of the threats and promises is also clearly dependent on the actor's perceived control of the resources required for their enactment” Tedeschi and Bonoma (1977) Threats: it is a communication of intent to punish the other if the other fails to concede The law: it permit to be passed restricting the actor's right to make concessions on the issue under consideration Communication: it involves both talking and listening. [...]

[...] Virgin Mobile listed on the London exchange on 21 July 2004, four and half year after launching its customer offer. Virgin's mobile successful business philosophy is centred on 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. He has a very good position on the market. They are a strong company with a good balance and a good directing Images, knowledge, legitimacy, are power The recent merger of NTL and Telewest provides NTL with competitive scale and an access network passing more than half of UK home, plus a strong platform on which to base brand and product extension. [...]

[...] NTL aurait augmenté son offre à 360 pence par action, valorisant Virgin Mobile à 930 ML M. Branson proposera de verser 12 pence supplémentaires par titre aux actionnaires minoritaires, leur permettant d'obtenir un total de 372 pence par action. (Financial Times) 15 January: Fidelity holds a 6.7 stake in Virgin Mobile and is considering asking the Panel to force Branson to seek the approval of shareholders for his agreed deal to licence his group's brand to NTL. (Telegraph) 17 January: The improved offer, which is expected to come in close to the £900m mark, and sees Sir Richard Branson taking £42m less for his 71 per cent share, is being touted by some onlookers as enough to satisfy the demands of the minority shareholders, who've been holding out for more cash ever since they rejected a £817m bid before Christmas. [...]

[...] NTL have present arguments in favour of his own welfare to the extent that the other values this welfare. NTL has discussed the bottom line. It refers to the final total benefit and costs of a deal. Negotiators often discuss prices in term of units, percentage or payments The offering choices For the negotiation, NTL needed of the Offering choices. The simplest is between two complete proposals. It is useful when the settlement range is understood but the relative importance of the issue is not. [...]

[...] The issues take part in the time and in the quality, then the negotiation have a lot of rules and it isn't based only on the money. NTL cover with this negotiation a number of aspects of NTL's consumer business Power 3.1 Definition “Power is the capacity to influence another party” (Pruitt 1976). It is the capacity to make successful demands, that is, to elicit concessions from the other party. It is too a broad phenomenon. It includes all of the conditions that encourage unilateral concession making by the other party. [...]