Cable Giants Face Second Takeover By US Investors

Reports this morning point to yet more upheaval for Britain’s cable industry, following ntl and Telewest’s confirmation of their merger earlier this week, with a consortium of American investors plotting a takeover bid for both companies in what could be one of the most complex private-equity transactions ever undertaken.

According to the Wall Street Journal (WSJ), a group of private-equity firms is considering a bid of more than $11 billion (£6.2 billion) for both cable operators. Such a move would be extremely complex, given that ntl and Telewest will continue their merger proceedings up until any offer is made or accepted.

According to the WSJ, the technicalities of such a deal have yet to be tested, especially in such a large scale acquisition.

However, the American investors are believed to have had their initial advances rebuffed by William Huff, the US financier and restructuring specialist with the largest shareholding in both ntl and Telewest. Huff is also believed to have recommended that neither company agree to deal with private equity firms.

There are no guarantees that a formal bid for the cable giants will be made, and no direct or formal approach has yet been made. Amongst those understood to be formulating the bid are the Blackstone Group of New York, and Cinven Group, BC Partners and Permira Advisors of London.

The union of ntl and Telewest will give the new company a footprint covering around half the homes in Britain, offering cable TV, telephone, internet and video on demand services to around five million residential subscribers (see Cable Giants Tie Up To Tackle Sky).

NTL: 01256 752000 www.ntl.com Telewest: 0845 142 0000 www.telewest.co.uk