acquisition of Virgin Mobile may have seemingly come out of nowhere for most of us, it had been in the works for quite a while. A recent story on Cellular News chronicles the process, which goes back to late last year. Yet that’s not the most interesting part of the story. According to the report, there was another company which submitted multiple bids to acquire Virgin. Theirs never matched Sprint’s, though, and the deal as we know it happened at the end of July. As the article says, it seems like some pretty serious interest from the mystery company.
On June 1st, Company X submitted a letter of interest to Virgin Mobile USA, offering a preliminary proposal to acquire the company based on an implied price of $4.27 to $5.00 per share. Company X also proposed to repay all outstanding loans to Virgin Mobile USA by its stockholders. However, there was an existing offer from Sprint Nextel of $5.22 per share, with the same debt repayment proposal. For its part, Virgin Mobile was seeking offers closer to $6.37 per share. On July 10th, Company X submitted a revised proposal to Virgin Mobile USA that increased the cash consideration to be paid to $5.00 per share but did not propose terms or amendments to some of the other areas of concern that had been raised during their negotiations over the prior month, specifically relating to wireless licenses, trademarks and tax liabilities.Clearly, Virgin didn’t get what it was seeking as a return. This caused one investor to file suit, but as this story reveals, getting more wasn’t an option. They had two bids and took the better of them. Not only that, but they had some bidding going on. A higher price just wasn’t in the cards. There’s no official word on the mystery company’s identity (hence “mystery”), but mocoNews.net takes a stab with Tracfone. That would make enough sense. There could be a few others, too. The prize is Sprint’s, though, and they should close the deal within the next few months. ]]>
Posted in Virgin Mobile
As far as I’m concerned, Sprint can have Virgin because they are not worth the sale anyway. I used to have a Virgin phone which I bought because I thought it was an upmarket brand but now they are giving phones away to the unemployed, low end of the market hence they are no longer upmarket. So those of you still tied in with Virgin consider what people like me think when you pull out that Virgin phone.
What are you? 5 years old. The stigma attached to pre-paid phones and pre-paid carriers is over. Boost, Virgin Mobile, and all of the other pre-paids, are signing up people by the thousands.
Also, I think it was Trac-Fone that was giving away free phones to the unemployed. In case you have not read a newspaper in a while, people in this country are hurting.
Hey Iarence, if it bugs you that bad, stick with Virgin Mobile contract/Helio side. They still charge more to those who want to pay it. You pay more , you get less. Everyone wins.
Forget Sprint or Virgin! I’m now with StrightTalk which runs on Verizon network. For $45/month unlimited calls/text – best deal all around.And if something better comes along(unlikely) with this cellular price war, I can always make the switch with no penalty since there’s no contract 🙂