Cable company Telewest Communications and pay-TV channel producer Flextech have announced the terms of their planned £2.26 billion merger (see Telewest/Flextech Merger Plans Revealed). The deal sees Telewest offering 3.78 new shares for each Flextech share, effectively valuing Flextech at 1,428p per share and putting a £10 billion plus value on the combined company.
Flextech’s chief executive Adam Singer will become chief executive of the merged company, whilst Telewest’s chief, Tony Illsley, takes on the role of group managing director.
A formal announcement of the terms of the deal was previously postponed following what was reported to be legal considerations thrown up by Telewest shareholder, Microsoft. All of Telewest’s stakeholders – Liberty Media, MediaOne and Microsoft – have now undertaken to vote in favour of the merger.
The combined company proposes the creation of “an integrated communications and media group focused on delivering a range of voice, video and interactive services across multiple platforms, underpinned by branded digital media content.”
“This merger is an important strategic step for Telewest. It will bring together Telewest’s advanced broadband distribution platform and product range with Flextech’s strong content and rapidly growing interactive capability. The merged group now has the potential to take the lead in the rapidly evolving broadband market,” says Illsley.
Last year, Telewest missed out on the opportunity to strengthen its position in the cable world by merging with rival group Cable & Wireless Communications (CWC) (see Telewest Chief ‘Disappointed’ About CWC/NTL Talks). CWC partnered up instead with the third major cable group in the UK, NTL, in an £8.2 billion merger agreement (see NTL Spends £8.2bn On Cable & Wireless Communications). The CWC/NTL deal is currently the subject of an investigation by the Competition Commission (see Cable & Wireless Communications “Disappointed” By Stephen Byers Move).
At 12:00pm this today shares in Flextech were up 72p (5.6%) at 1,370p; Telewest stock was up 8źp at 382p.
Telewest Communications: 01483 750 900 Flextech: 020 7299 5000
