NTL Offers $1.4 Billion for Virgin Mobile

British cable company NTL on Monday offered 817 million pounds ($1.4 billion USD) to purchase Virgin Mobile, and announced plans to create a media giant under the Virgin brand consisting of TV and Internet, as well as fixed and mobile phone service.

Richard Branson, the billionaire entrepreneur that owns 72 percent of Virgin Mobile, would become NTL's largest shareholder with a 14 percent stake in the combined company.

However, shares of Virgin Moile rose in the UK after a statement from the board of directors seemed to indicate the company would try to negotiate a better offer price.

"In considering its response, the Board of Virgin Mobile will be mindful of its duty to maximize value for all shareholders," the board said in prepared remarks sent to the London Stock Exchange.

The Virgin brand name has graced many products, including an airline, pensions, cola, a record label, and even condoms. The company has received high marks from UK consumers for its reputation for customer service. Virgin even recently launched a subscription music store in the US and UK called Virgin Digital.

The mobile division does not have its own network, instead leasing capacity from Deustche Telekom's T-Mobile wireless group. Still, Virgin Mobile is the fifth largest provider in the country with 4.15 million customers.

A combined company could pose a threat to Rupert Murdoch's BSkyB telecommunications company within two to three years if the merger goes smoothly, analysts said.