Cable & Wireless Communications (CWC) and Telewest Communications, the first and second largest cable groups in the country respectively, have confirmed that they are in preliminary talks which could see the mega-merger of the two groups.
A spokesperson from Cable & Wireless Communications told Newsline this afternoon that “preliminary discussions are being held between them and their major shareholders concerning various corporate options, which may include, among other things, the transfer of various businesses of CWC and Telewest.”
Although the joint statement from both Telewest and Cable & Wireless Communications confirmed that the discussions were taking place, it stressed that “the current discussions are at an extremely early stage and may or may not lead to any transaction.”
Cable & Wireless Communications is the UK cable division of Cable & Wireless, which recently appointed a new chief executive, Graham Wallace (see Newsline). His arrival is rumoured to have been instrumental in precipitating these discussions.
Neither group would comment on exactly how the merger would take place, but speculation in the press today suggests the delisting of CWC, with C&W and Telewest sharing the spoils. Telewest would take the residential TV and telephony arm of CWC, and C&W would absorb the business telephony assets.
If a deal of this nature were to take place, Telewest would become by far the UK’s largest residential cable and telephony operator with potential market of around 9 million homes and a current customer base of approximately 1.8 million homes, according to January 1999 ITC data.
Both C&W and CWC saw rises in their share prices yesterday (see Sharewatch). By 12:30pm today, C&W’s price has risen 22˝p to 798p, and CWC has increased to 44˝p to 799p. Telewest had increased by 12źp by 12:30pm today, to stand at 308.5p – a 39p increase on Telewest stock value one weel ago.
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