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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 4, 2006
NTL INCORPORATED
(FORMERLY KNOWN AS TELEWEST GLOBAL, INC.)
(Exact name of Registrant as specified in its charter)
DELAWARE FILE NO. 000-50886 52-3778427
(State of Incorporation) (Commission File (IRS Employer
Number) Identification No.)
909 THIRD AVENUE, SUITE 2863, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 906-8440
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
|X| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
SIGNATURES
Exhibit 99.1 U.S. Press Release dated April 4, 2006
Exhibit 99.2 Announcement Pursuant to Rule 2.5 of the U.K. Takeover
Code dated April 4, 2006
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
OFFER FOR VIRGIN MOBILE, LICENSE AGREEMENT WITH VIRGIN ENTERPRISES AND
ANCILLARY MATTERS
On April 4, 2006, we announced that we had reached agreement with
the independent board of directors of Virgin Mobile (UK) Holdings plc
("Virgin Mobile") on the terms of an offer, with a share alternative
offer and a share and cash alternative offer, to be made by us and one
of our wholly-owned subsidiaries to acquire 100% of the shares of Virgin
Mobile (the "Offer"). Virgin Mobile is the largest mobile virtual
network operator in the United Kingdom, with 4.3 million customers.
Virgin Mobile uses the network of T-Mobile (UK) Limited for the
transmission of its traffic.
Virgin Mobile shareholders may elect to receive, for each share of
Virgin Mobile, (a) (pound)3.72 in cash, (b) 0.23245 shares of our common
stock, or (c) 0.18596 shares of our common stock plus (pound)0.67 in
cash. Virgin Group Investments Limited ("Virgin Group")and Virgin
Entertainment Investment Holdings Ltd. ("Virgin Entertainment") have
irrevocably agreed to elect alternative (c) above in respect of Virgin
Group's aggregate beneficial interest in approximately 71.2% of Virgin
Mobile's shares. Other shareholders holding an additional 0.82% have
also irrevocably agreed to accept the Offer.
The independent board of directors of Virgin Mobile has confirmed its
intention unanimously to recommend the Offer. A copy of the U.S. press
release issued by us on April 4, 2006 is filed herewith as Exhibit 99.1 and
incorporated herein by reference. A copy of our announcement of the same
date issued in the United Kingdom under Rule 2.5 of the U.K. Takeover Code,
which includes further information about the Offer and the conditions to
the Offer, is filed herewith as Exhibit 99.2 and incorporated herein by
reference.
We and Virgin Mobile intend to implement the Offer through a U.K.
Scheme of Arrangement, and we have entered into an Implementation Agreement
with Virgin Mobile that sets forth certain obligations of the parties in
connection with the mechanics of that implementation, the conduct of Virgin
Mobile's business pending completion of the transaction, and other matters.
After receiving court approval to hold a shareholder meeting, Virgin Mobile
shareholders will be asked at a meeting of shareholders to approve the
Scheme of Arrangement. The court will then be asked to confirm the fairness
of the Scheme. We intend that the Scheme will be structured to be exempt
from registration under the Securities Act of 1933, as amended, pursuant to
Section 3(a)(10) of that act. The transaction does not require approval by
our shareholders.
We have also entered into a trade mark license agreement with
Virgin Enterprises Limited under which our existing right to use certain
Virgin trade marks within the United Kingdom and Ireland in respect of
our internet business will be extended to cover our other consumer
businesses, including the provision of communications services (such as
internet, television, fixed line telephony, and upon the acquisition of
Virgin Mobile, mobile telephony), the acquisition and branding of
sports, movies and other premium television content, and the branding
and sale of certain communications equipment related to our businesses,
such as set top boxes and cable modems. The agreement provides for a
royalty of 0.25% per annum of our revenues from the relevant businesses,
subject to a minimum annual royalty of (pound)8.5 million (the royalty
would have been approximately (pound)9 million based on 2005 revenues
including Virgin Mobile and our subsidiary Virgin.Net). The agreement
has a term of 30 years, although we can terminate it after 10 years on
one year's notice, and it is subject to earlier termination by us in
certain other circumstances, including (subject to specified payments) a
change of control. The agreement also entitles us to use a corporate
name that includes the Virgin name. Under the U.K. Takeover Code, the
license agreement is subject to approval by a majority of the
shareholders of Virgin Mobile other than those associated with
affiliates of the Virgin Group.
An ancillary agreement to the trade mark license agreement permits
Virgin Enterprises to propose one candidate (and successors to that
candidate) to serve on our Board of Directors. Additionally, Virgin
Enterprises is permitted to propose a senior marketing executive for
employment by our company.
In connection with the issuance of our stock in the Offer, Virgin
Entertainment, which will hold our shares at closing (and, in respect of
certain provisions, Sir Richard Branson), has entered into an Investment
Agreement dated April 4, 2006 that will be effective upon the closing of
the transaction. The Investment Agreement:
(a) limits the disposition of our shares by Virgin Entertainment
and its permitted transferees from the date of the closing through the
18 month anniversary of that date. Under these limits, Virgin
Entertainment will be able to sell (cumulatively, including all prior
sales):
(i) 12.5% of their initial holding after three months;
(ii) 25% of their initial holding after six months;
(iii)37.5% of their initial holding after nine months;
(iv) 50% of their initial holding after twelve months;
(v) 75% of their initial holding after fifteen months; and
(vi) 100% of their initial holding (i.e., no continuing
restrictions) after eighteen months.
(b) provides for certain limitations on the conduct of these
stockholders and Sir Richard Branson through our 2008 annual meeting,
including:
(i) a cap of 15% on the acquisition of our voting
securities (subject to certain exceptions and to our shareholder
rights plan);
(ii) a restriction (with certain exceptions) on selling our
shares to any person or group that would own 1% or more of our
voting securities after the transaction;
(iii)an agreement to vote pro rata to other shareholders or
in support of actions recommended by our board in respect of any
amendment of the Company's articles or bylaws, any proposal that
could facilitate a change of control of the Company, or for the
election of directors. However, the shareholders retain the right
to vote against a business combination transaction recommended by
the board and refuse to tender voting securities in connection
with such a recommended transaction;
(iv) restrictions on offering, proposing or seeking to enter
into business combination transactions, participating in
solicitation of proxies, proposing stockholder proposals, publicly
opposing recommendations by our board, related discussions with
third parties or public announcements, or assisting others to do
any of the foregoing.
(c) provides these shareholders with certain demand registration
rights.
We will finance the maximum cash consideration in the Offer, and the
refinancing in full of Virgin Mobile's existing credit facilities,
utilizing (i) additional borrowings under our credit facilities previously
disclosed in connection with our merger with Telewest Global, Inc.
("Telewest"), which closed on March 3, 2006; and (ii) cash on hand. We will
borrow an additional (pound)475 million, comprising (a) an additional
(pound)175 million of borrowings under the 5-year amortizing term loan
facility entered into in connection with the acquisition of Telewest, and
(b) a (pound)300 million 6 1/2-year bullet repayment facility.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 4, 2006 NTL INCORPORATED
By: /s/ Bryan H. Hall
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Bryan H. Hall
Secretary
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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99.1 U.S. Press Release dated April 4, 2006.
99.2 Announcement Pursuant to Rule 2.5 of the U.K. Takeover Code dated
April 4, 2006