The investment firm, Liberty Media has dropped its offer to buy 20% of Telewest’s bonds and withdrawn its three directors from the company’s board. A group of bondholders, unhappy with Liberty’s offer, had already filed an injunction to block the deal claiming that aspects of it were illegal (see Liberty Extends Telewest Tender).
The ongoing downtrend in international stock exchanges is cited as the main reason behind today’s development. Liberty, which is owned by the US media magnate John Malone, has withdrawn the directors to avoid accusations of conflict of interest.
“The continuing decline in world markets has caused us to review our priorities for additional investments,” said Liberty’s president and chief executive Robert R. Bennett. “In the context of this review, we have concluded that Liberty Media’s interests are best served by terminating the tender offer.”
Liberty still has a 25% stake in Telewest and will continue to liaise with the debt-laden cable operator as it plans a financial restructuring progamme.
Telewest seems likely to follow the lead of its major rival NTL and authorise a debt-for-equity swap that would give majority control of the company to bondholders.
