NTL and Telewest close to £3.4bn deal - rival BSkyB and BT

gameboy

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NTL, Britain’s biggest cable company, is poised to announce a near $6 billion (£3.4 billion) cash and shares purchase of its smaller rival Telewest, creating a business with the size to challenge BT and BSkyB.

Long-running talks between the two sides are understood to be close to a conclusion and it is hoped that the deal will be finalised next week — although it is possible that it could be subject to further delay.

Simon Duffy, the chief executive of NTL, is expected to take the top job in the combined company, leaving his low-profile counterpart at Telewest, Barry Elson, without a position once the takeover is completed.

The combined cable company will have nearly five million customers and it will be the only significant business to be able to provide broadband, telephony, and pay-television in a single package.

However uncertainty remains as to whether Telewest will continue to sell Flextech, its television arm. Documents being prepared for the merger announcement suggest that NTL wants to retain strategic control of Flextech.

Some bidders for Flextech — which is valued at more than £1 billion — claim to have had assurances that the sale process continues.

Some NTL and Telewest investors are also thought to be demanding that the auction, which is being handled by Deutsche Bank, continues.

Those still in the race for Flextech are BSkyB, the satellite broadcaster, RTL, the owner of Five, Discovery Communications, which is partly backed by John Malone, and the American media giants Viacom and Time Warner.

BSkyB is 36.8 per cent owned by News Corporation, parent company of The Times.

Meanwhile ITV, Channel 4, Liberty Global — another John Malone vehicle — and Sparrowhawk Media, the venture capital-backed owner of the Hallmark Channel, have all been ruled out of the running.

Sparrowhawk is thought to have submitted an unsuccesful bid of £975 million.

NTL may offer a small premium to Telewest investors, although shares in the target have performed strongly since March.

While NTL is the larger company by turnover, the two are almost identically valued at between $5.5 billion and $5.6billion. Both companies are listed on Nasdaq.

Bringing the two companies together would end a tortuous journey of uniting Britain’s weak and fragmented cable industry.

Source: Times
 

gameboy

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Done and dusted today $6billion.

With NTL Broadband and Telewest offer faster Broadband for the same price.

As NTL are the parent let's hope my speed gets increased in line with Telewest.

Every report I've read go on about 'now a major BSkyB competitor - don't they realise they buy most of their content from BSkyB - it's a win for them.

Got some share in Telewest and they were Cr*p - maybe make some money now - ding, dang, doo.
 
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