Virgin Mobile, the UK-based mobile phone operator controlled by Sir Richard Branson’s Virgin Group, on Tuesday accepted cable group NTL’s takeover offer valued at £962.4m ($1.7bn).

The formal offer includes a per share offer of 372p in cash, a paper alternative of 0.23245 NTL shares valued at 389p, as well as a mixed option of 311p in NTL shares plus 67p in cash.

NTL first proposed the offer in January after an initial £817m indicative offer was rejected.

Sir Richard’s Virgin Group, owner of a 71.3 per cent stake in the mobile group, had indicated in January that it would choose the third option, which was then valued lower than the 372p cash offer approved by Virgin Mobile’s minority shareholders.

NTL shares have, however, gained 23 per cent since, lifting the values of the stock-based options. The number of shares offered for each Virgin Mobile share has also been adjusted since January following the closing of NTL’s $6bn merger with UK cable rival, Telewest, last month.

Nasdaq-listed NTL will have the use of Virgin’s brand for its consumer business under a 30-year licensing agreement that stipulates a minimum royalty each year of £8.5m.

Lex live: NTL/Virgin Mobile

Virgin Mobile sends ’bite-sized boredom busters’ like celebrity gossip over its phones to keep users happy. Shareholders in the UK mobile phone operator must now decide what will make them happy – cash or shares in NTL.

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The deal creates the UK’s first media company to offer “quadruple play”, comprising television, broadband and fixed-line and mobile phone services.

NTL said in a statement that, having concluded its merger with Telewest, the Virgin Mobile deal would “help transform [NTL] from the UK’s leading triple-play cable provider into a national entertainment and communications company, harnessing the powerful Virgin consumer champion brand.”

The deal still has to be signed off by T-Mobile, whose UK network Virgin Mobile uses.

Virgin Mobile shares, which closed at 387p on Monday, were down 7p in early London trade on Tuesday. NTL shares closed at $29.11 on Monday.