NTL, Telewest to merge to challenge BSkyB's might |
|
|
Published
:
Tue, 04 Oct 2005 09:05
|
LONDON: British cable company NTL is buying rival Telewest Global for about $6 billion to create volumes and muscle to take on pay-TV company BSkyB. NTL will pay $23.93 -- $16.25 in cash and 0.115 NTL shares -- for each Telewest share. It will also absorb $3 billion of Telewest's debt.
The NTL-Telewest combination will be a true ICE operator -- it will have Internet, telephone and television services -- catering to some 5 million households. It will be second to BSkyB, which has some 8 million customers. In phone operations, it will still train BT Group.
NTL's chief executive Simon Duffy will be the CEO and president of the new company while Telewest's acting CEO Barry Elson will leave the company once the deal is through.
NTL chairman James Mooney will head the enlarged board, which will have only two directors from Telewest. Anthony Stenham, chairman of Telewest, will become deputy chairman of the new group.
NTL shareholders will own 75 per cent of the new company and Telewest shareholders 25 per cent.
Based on unaudited figures for the 12 months ending June, the unified entity will have revenues of 3.4 billion pounds and 1.2 billion in operating profit.
The deal is expected to close in the first quarter of 2006, following approval by regulators. Telewest will now not sell off its Flextech unit, which it had put up for sale early this year. It will be part of the new entity.
BSkyB had been a candidate for the Flextech unit, so has been RTL, the European television broadcaster, and owner of Britain's Channel Five.
The deal is a culmination of three years of speculation about the possible merger. At one time, both the companies had handed over control to creditors (NTL in 2003 and Telewest in 2004) after failing to pay the interest on their borrowings.
|
|
|
|
|
|
Print this Story
