LONDON (Dow Jones) - The board of Virgin Mobile said it's rejecting U.K. cable operator NTL Inc.'s $1.4 billion offer, but majority owner Richard Branson on Thursday said a deal isn't far away.

Virgin Mobile, the U.K. virtual mobile network operator that's 72%-owned by Branson, said it's rejecting the possible offer from NTL (NTLI) because it " materially undervalues Virgin Mobile."

NTL on Monday said it may offer 323 pence a share, or 832 million pounds, of cash and shares for the company. The move is a bid to offer so-called quadruple- play services: cable television, broadband Internet, and fixed- and mobile- telecommunications services.

Virgin Mobile shares edged 0.5% lower to 343.75 pence in early London trade on Thursday.

Virgin Mobile handles billing and marketing for its operation, which piggybacks off of T-Mobile's network. Virgin Mobile said it consulted its major independent shareholders in rejecting the deal. Branson's representative was excluded from the discussions.

But Branson said a deal was close.

"The non-executive directors have decided they want to extract better value from NTL, and I wish them well with that," Branson told reporters at a briefing in Sydney.

"But the difference between what they have asked for and what NTL has offered is not material in financial terms, so I am hopeful that either NTL will come up with it or a compromise and a deal will be reached. It's up to NTL to decide whether they offer more, but the difference is only about GBP22 million," he said.

(END) Dow Jones Newswires

12-08-05 0515ET Copyright (c) 2005 Dow Jones & Company, Inc. Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.