Virgin Hushes on IPO
Industry scuttlebutt this week suggests the telco is lining up advisors for a summer flotation, in an effort to fund an expansion by parent company Virgin Group into the low-cost domestic U.S. airlines market.
Any such move would follow previous IPO announcements from Belgacom (Euronext: BELG), Eircom Ltd. (London: EIR), and Wind Telecomunicazioni SpA (see Italians Join the IPO Flurry and Mixed Fortunes for Euro IPOs).
Virgin Mobile UK admits that a public listing is more than a slight possibility but won’t divulge details.
“We don’t have any more comment to make, but we are considering a float option along with other finance-raising options,” spokeswoman Alison Bonny tells Unstrung. “We are keeping our cards close to our chest. It is an ongoing issue.”
Bonny is no more specific on a timescale for any decision, adding that an announcement could be made “in the short to medium term.”
A public listing would surprise few industry insiders in light of the carrier’s strong growth. Operating as a Mobile Virtual Network Operator (MVNO), Virgin Mobile UK leases spectrum and network equipment from T-Mobile (UK) and boasts the country’s fastest growing GSM (Global System for Mobile communications) subscriber base.
A 53 percent annual increase in customer numbers took its total user base to over 3.6 million as of 2003's final quarter (see Virgin Mobile Adds 0.5M Subs).
The recent settlement of a long running dispute with network partner T-Mobile has also strengthened the possibility of a public offering. In January the MVNO announced that T-Mobile “will have the right to receive 25 percent of any value over £550 million [US$999.97 million], up to a maximum payment of £100 million [$181.81 million], in the event of any future value realisation of Virgin Mobile, within the next two and a half years.” (See Virgin Resolves Dispute.)
The carrier market is not the only industry sector to have witnessed an upturn in IPO activity in recent months. Equipment vendors such as Cambridge Silicon Radio plc (CSR), Atheros Communications Inc. (Nasdaq: ATHR), and Netgear Inc. (Nasdaq: NTGR) have also jumped on the bandwagon (see CSR Preps for IPO, Atheros Files for IPO, and Netgear Shares Soar After IPO).
— Justin Springham, Senior Editor, Europe, Unstrung