NTL and Telewest merger to be announced this week |
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Published
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Mon, 03 Oct 2005 06:05
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LONDON - It is reported that Britain’s largest cable operators Telewest and NTL are on the verge of announcing their merger early this week. The combined group is to be valued at £6 billion.
Cable company NTL is rumored t have offered its smaller rival a $22 per share deal, though some analysts say that the figure could be as high as $29 a share. This means that the deal could be somewhere in the region of $6 billion (£3.4 billion) cash and shares offer.
The combined group would have a customer base of 2.5 million broadband customers. This is almost 500,000 more than the leading provider of this service; BT. In fact observers say that the merged entity will pose a serious challenge to the erstwhile state-run company. "The final bits of negotiations could get agreed tonight," said a source close to the negotiations. If the deal were indeed finalized, it would create a massive UK cable television company "with a market capitalization of over $10 billion."
Telewest had opted out of an auction to sell its business and had agreed to negotiate with NTL first. Both companies with their combined resources would be able to offer a better challenge to Rupert Murdoch's BSkyB, which currently dominates the market. Deutsche Bank is the financial adviser of Telewest and the company has begun the process to dispose off Flextech, which includes UKTV and other channels. Cob Stenham, the chairman of Telewest could stay on in the merged entity as a consultant or deputy chairman.
Goldman Sachs Group Inc is advising NTL in the deal. Simon Duffy, the chief executive of NTL is expected to be nominated to essay the same role on the combined company.
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