Virgin mobile US floatation takes Merrill and CSFB on board |
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Mon, 25 Apr 2005 01:00
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An estimated floatation of about £1.6billion of the Virgin group’s American counterpart, Virgin Mobile USA will now be handled by investment banks, Merrill Lynch and Credit Suisse First Boston (CSFB), according to company sources. J P Morgan has also joined Merrill to manage debt and fund issues, with a ‘junior role’ in the floatation.
A joint enterprise between Virgin Mobile Holdings plc and US cell phone operator Sprint, Virgin Mobile USA started in July 2002 and boasts of more than a three million customers. Sir Richard Branson, the owner of the Virgin group stated last month that the two companies, J P Morgan and Merrill, were serving as financial advisers to the company in its $700m debt issue.
| Meanwhile, executives also suspect the coming together of Merrill Lynch and CSFB to result in a NASDAQ listing. Called the "virtual network operator" just like the Virgin Mobile in the UK, the US Virgin operator is administered independently from the London-listed business. It buys airtime from Sprint but manages its billing and marketing services on its own.
Sir Richard will really have his spirits lifted in the event of a successful US float, as he could then plough the funds back into his space tourism plan, Virgin Galactic. He also hopes for his US venture to fare smoothly in the public market, more than his British business.
In the last minute, the float price for Virgin Mobile had to be slashed to 200p from 235p-285p as stated in the prospectus, and the stock remains volatile despite the shares being priced higher than their float price.
No comments, however, could be had from Virgin Mobile about the issue. Even Merrill and CSFB officials were unavailable for comment.
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