|
Telewest to buy Flextech
|
 |
December 17, 1999: 3:21 a.m. ET
U.K. cable player plans $3.2B offer for TV, Internet content provider
|
LONDON (CNNfn) - British cable operator Telewest Communications confirmed plans Friday for a recommended merger with media content provider Flextech in a deal valued at around 2 billion pounds ($3.2 billion).
The deal would boost Telewest’s position as the country’s second-largest cable company, after it lost out to rival NTL in the race to acquire C&W Communications earlier this year.
Telewest and Flextech, which provides content for TV and Internet services, said on Dec. 6 that they were in merger talks. A deal had been expected to be announced Thursday, but talks continued longer than expected.
The deal marries the U.K. interests of AT&T’s (T) Liberty Media Group, which has the largest single stake in Flextech and 21.6 percent of Telewest. Also on the cable company’s shareholder register is software giant Microsoft (MSFT), which is awaiting regulatory approval for its purchase of a 29.9 percent Telewest stake.
Under the preliminary agreement, Telewest would offer 3.78 of its shares for every Flextech share. Based on Thursday’s closing prices, that values the latter at 1,228 pence a share, nearly 1.5 percent below Flextech’s closing price of 1,247 pence Thursday .
Telewest (TWT) shares ended at 325 pence Thursday.
The agreement comes at the end of a long period of consolidation in the U.K. cable sector which has shrunk from around 20 players to just two large groups over the past five years.
The enlarged Telewest would have a market capitalization of around 9 billion pounds and marry Flextech’s 15 pay-TV channels to Telewest’s 1.5 million household subscribers. Flextech’s Internet content would also provide a fillip for Telewest, which has been criticized for not developing its Web services faster, at a time when interactive TV is starting to gain ground in Britain.
Flextech chairman and chief executive Adam Singer will become chief executive of the enlarged group while Telewest CEO Tony Illsley will be managing director.
The deal will probably have to secure regulatory approval. Competition authorities are already considering NTL’s acquisition of CWC and the $12.6 billion merger last month of Carlton Communications (CCM) and United News & Media (UNWS). 
|
|
|
|
|
 |
|
