Virgin Mobil's proposed takeover by NTL

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Virgin Mobil's proposed takeover by NTL

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Abstract

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.

Introduction
Chronology
The main issue
1. Presentation
2. Substantive issue
3. Cost and branding
4. Subsidiary issue
The share
1. Time
2. Quality
3. Conclusion
Power
1. Definition
2. Charisma in its many but often fleeting forms is power
3. Images, knowledge and legitimacy
Strategy
1. Kinds of strategies
2. Integrative strategy
3. The condition for this negotiation
4. Development of the strategy
The positional commitment and offering choices
Conclusion
Bibliography

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Extract

[...] NTL is UK's second largest communication company. The design and capability of its network provides NTL with the ability to offer triple play, competitive communications solutions to business customers. This company is very famous for its technology but they lack a famous brand to develop it and attract the consumer. NTL is set to benefit from Virgin's branding, BBC news December 2005 The Virgin brand is the most admired brand in the UK and Virgin is the 27th most respected company in the world. [...]

[...] Virgin received an approach from NTL that may or may not lead to a formal offer being made for the company. Virgin mobile earn a lot of money and NTL the license brand thus both win. We can conclude that it is an integrative negotiation. When they both negotiate, they try to be pleasant and courteous, and hope the opponents will also be. The negotiators try to manipulate the degree of cooperation, friendliness, or formality to their advantage. Negotiators hope to maintain a positive climate. [...]

[...] 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. Branding: are delighted to announce the recommended offer and the brand licensing with virgin, which not only delivers mobile capability to our product bundle but also gives us access to leading consumer brand. It truly is a step-change transaction not only for NTL but for the media sector as a whole in the James Mooney, executive Chairman of NTL NTL will use the Virgin Brand to offer internet access, TV and fixed line and mobile telephone. [...]

[...] Harvard business essential negotiation, Harvard business school press, Boston, P 2 Brian Dietmeyer and Rob Kaplan, Juin 2004, Strategic Negotiation: A Breakthrough 4-Step Process for Effective Business Negotiation, Dearborn BBC news, (Monday December 2005) NTL and Virgin in takeover talks ,http://news.bbc.co.uk/1/hi/business/4496894.stm BBC news, Monday January 2006, NTL ups offer for Virgin Mobile, http://news.bbc.co.uk/1/hi/business/4618744.stm Graeme Wearden, (April 2006), NTL completes takeover of Virgin Mobile, CNET News.com, http://news.com.com/NTL+completes+takeover+of+Virgin+Mobile/2100-1037_3- 6057381.html Tim Richardson, (Tuesday 4th April 2006), NTL confirms Virgin Mobile buy- out At last The register, http://www.theregister.co.uk/2006/04/04/ntl_virgin/ By Andrew Murray-Watson (19/02/2006), Virgin and NTL: 'It's nearly there', business. [...]

[...] The company also knows that NTL needed its brand and it can permit Virgin to reject the offer and ask for more Power of the takeover NTL believes that a combination with Virgin mobile would create a potential for revenue increase and reduce customer churn by providing an appealing product package under the virgin brand; and increasing ARPU though the effective cross selling of mobile services to customer homes serviced by NTL. As referred to above, NTL expects to generate synergic revenue over a period of time. [...]

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