NTL Enters Exclusive Negotiations With Cable & Wireless
UK cable company NTL, this morning announced that it has now entered exclusive discussions with Cable & Wireless in order to conclude its £8 billion bid for the cable assets of Cable & Wireless Communications (CWC). NTL’s bid for CWC is being backed by France Telecom, which acquired a 10% stake in NTL for £640 million at the end of last week (see France Telecom Takes £640m Stake In NTL To Back CWC Bid).
The exclusivity of the discussions between NTL and CWC leaves the third major UK cable group, Telewest Communications, temporarily on the sidelines despite its £8 billion offer for CWC made at the weekend. Cable & Wireless, which holds a 53% stake in CWC, will have to gain the support of CWC’s independent shareholders before a deal can be concluded.
Recent developments in the consolidation of the UK cable industry have seen NTL somewhat sneak up on the inside in order to reach this stage of discussions with Cable & Wireless. CWC and Telewest have been in negotiations since April this year (see Cable Giants Meet For Merger Talks) and are understood to be at an advanced stage despite the emergence of NTL as a merger front-runner.
A spokesperson for Telewest this morning played down the exclusive discussions between CWC and NTL, saying that Cable & Wireless is considering Telewest’s offer along with NTL’s and is merely discussing the NTL details at present. Telewest is expected to issue a formal statement later today.
At 11:24am today, NTL shares, which are listed on NASDAQ, were up $4 at $102; CWC stock was unchanged at 731˝p. Telewest was down 6.3p at 299.2p.
Separately, NTL has also announced that acquisition of a number of broadband cable franchises from BT. The franchises are located in Westminster and Milton Keynes and cover a total of approximately 210,000 homes, around 189,000 of which are passed by broadband networks. The acquisitions increase NTL’s total franchise homes in the UK and Ireland to more than 5.8 million.
