Ntl In No Rush To Sell Off Flextech
Cable operator ntl this morning confirmed that a sale of Telewest’s Flextech television business, which had been widely expected in the run up to the two firms’ merger, has now been put on hold at least until after the consolidation is complete.
Simon Duffy, chief executive of ntl, told reporters this morning that the company currently plans to keep Flextech as an “integral part” of the new group, explaining that its importance as a “strategic asset” made it more valuable to the company than the funds which could be raised through an auction.
“We’ll sit down with Telewest and review the options [for Flextech],” he explained. “It is a strategic asset. Auctioning it off to the highest bidder is probably not the obvious thing to do.”
The new group will be lead by Duffy, who has a history of questioning cable-owned content firms, preferring instead to concentrate on the distribution and infrastructure side of the business.
However, this morning saw the TV boss more open to the idea of content creation being a staple of the new firm’s business. “In a multi-channel environment, control of a strategic content asset of the quality of Flextech is clearly a very important strategic lever. It would be a very foolish person who failed to acknowledge that,” he said.
The merger of ntl and Telewest was confirmed by the companies this morning. Under the deal a new cable entity will be founded, with a footprint covering around half of the UK’s homes. The new business will be able to compete more effectively with operators such as BSkyB and Freeview, as well as tackling emerging television providers such as BT (see Cable Giants Tie Up To Tackle Sky).
Telewest’s sale of Flextech had been progressing steadily as recently as last month, with the Sunday Times reporting that ITV had been eliminated from the race for control of the company, leaving BSkyB and RTL as the front runners to secure a deal (see Flextech Bidding Narrows As ITV Dropped).
NTL: 01256 752000 www.ntl.com Telewest: 0845 142 0000 www.telewest.co.uk