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NTL, C&W in exclusive talks
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July 19, 1999: 4:07 a.m. ET
U.K. cable companies discuss possible $12.5B deal
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LONDON (CNNfn) - U.K. cable operators NTL and Cable & Wireless are in exclusive talks on a possible 8 billion pound ($12.5 billion) deal, the companies confirmed Monday.
The fact that the companies have signed an exclusive agreement leaves rival operator Telewest out in the cold. Telewest had been in talks with C&W since April.
The length of the exclusivity clause between NTL and C&W is not known.
NTL and Telewest are interested in buying the residential cable assets of CWC, which is 53 percent-owned by Cable & Wireless (CW.).
To provide the financing, heavily-indebted NTL (NTLI) has secured backing from France Telecom (PFTE). NTL is listed on Nasdaq, but operates mainly in the United Kingdom.
The negotiations represent the closing twists in the consolidation of the U.K. cable industry, which has slimmed down from more than a dozen companies to just three in the last few years.
The concentration of power has coincided with the return to favor of the sector in the investment community. For years the companies were dogged by declining share prices as profitability seemed remote and investment spending requirements soared.
The sector has returned to the spotlight with a plethora of deals and the interest of companies such as Microsoft, which see digital cable services as an excellent way of accessing the Internet. Microsoft owns 30 percent of Telewest and a 5 percent stake in NTL.
Officials at NTL and Telewest could not immediately be reached for comment.
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