Cable Giants Set To Announce Merger This Month

Cable giants NTL and Telewest look set to announce their long-awaited merger this month, with reports over the weekend predicting that the two companies would begin formal steps towards consolidation before the end of July.

The Independent on Sunday claims the tie-up will have begun to take shape within weeks, with a source close to the current talks claiming that a delay beyond July is “extremely unlikely.”

The merger would form a multi-channel operator with the potential to tackle current market leading Sky, with the two companies able to offer increased interactive features, as well as on-demand viewing technology and a triple-play of TV, phone and internet services.

The merger is expected to take the form of a cash and shares offer for Telewest by NTL, with NTL chief executive, Simon Duffy, taking the top job with the consolidated group. Telewest chief Barry Elson is expected to become non-executive chairman for the new company.

Analysts at UBS have predicted an offer of $24 per share for Telewest from NTL, valuing the broadcaster at just under $6 billion.

The two companies began preliminary merger talks earlier this month, with the move due to create a communications firm with annual revenues of around £3.3 billion, and around five million customers. However, the merger has yet to be given the green light by competition watchdogs, although this is expected, as the firms do not currently operate in any overlapping service areas (see Cable Giants Begin Merger Talks).

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