Telewest And Flextech Reveal Merger Talks
Pay-TV group Flextech and cable operator Telewest Communications have this morning confirmed that they are in talks which could lead to the merger of the two groups and the creation of a £10 billion TV and telecommunications company.
In a statement the two companies said: “These discussions, which include the possibility of a combination of the two businesses, are at a very early stage and there is no certainty that any agreements will be reached.” However, the news affected Flextech’s share dramatically, with stock jumping 182˝p in value to 1,532˝p.
Neither group was prepared to reveal details about the plans this morning but it is believed that preliminary talks began on Sunday. A merger between the groups would lead to the creation of a huge pay-TV provider and could ultimately lead to further consolidation within the cable industry.
Telewest lost out last year when NTL acquired Cable & Wireless Communications (CWC) (see NTL Spends £8.2bn On Cable & Wireless Communications) and became the largest cable operator in the UK. Months earlier Telewest had itself begun preliminary talks with CWC (see Cable Giants Meet For Merger Talks) which led to an £8 billion bid for the group. NTL pipped Telewest to the post, however (see NTL Enters Exclusive Negotiations With Cable & Wireless), and began consolidation within the cable sector. The NTL/CWC merger is currently under investigation by the Competition Commission (see Cable & Wireless Communications “Disappointed” By Stephen Byers Move).
A deal between Flextech and Telewest would allow the integration of their complementary assets: Telewest provides carriage and access as the second largest UK cable operator with 1.4 million homes connected to its services; Flextech provides pay-TV content with its 15 themed channels, currently watched in over 17 million homes. Flextech’s channels include the UKTV portfolio, produced in partnership with the BBC. United the two are a force to challenge BSkyB in the emerging world of multi-channel, digital television.
According to current stock prices, Telewest is valued at just over £8 billion and Flextech is worth around £2.4 billion.
Telewest Communications: 01483 750 900 Flextech: 0171 299 5000