NTL, the UK's second largest cable company last week greatly improved its chances of snatching the prize, after France Telecom threw its weight behind the New York-listed cable company's bid.
Telewest, the other bidder for CWC's residential business and the UK's leading cable supplier, has been in talks to buy the concern since Easter and is backed by Microsoft.
"Whoever succeeds in winning Cable & Wireless Communications will emerge as the consolidator and will eventually take over the loser of this contest," said Michael Nathan-son, an analyst at Sanford C Bernstein in New York.
The CWC board meets on Tuesday to examine the bids although a spokesman for CWC stressed that negotiations are going on all weekend. "There are meetings going on every hour."
Whatever the outcome, a large telecoms and media player will emerge that is likely to give both BT and BSkyB a serious run for their money, analysts said. That can only be good news for consumers as prices will fall as a result of the renewed competition.
Both bidders are offering a combination of cash and shares for CWC's residential business, which accounts for 25 per cent of the company's sales and provides phone, internet and television services to British households. Cable and Wireless, which owns 53 per cent of CWC, wants to get out of the consumer market and concentrate on business customers only. The increased interest in CWC sent the company's share price soaring 20 per cent last week.
CWC shareholders will be choosing between two very different management styles. NTL is led by US entrepreneur Barclay Knapp, a Harvard Business School graduate who has a reputation as an aggressive deal maker. Woking- based Telewest is the product of successive mergers of smaller UK cable companies. Its chief executive, Tony Illsley, used to head Pepsico's Walkers crisps unit and is seen as a branding whiz kid.
There is also a possibility that all three companies, NTL, Telewest and CWC could join together, although insiders said that was the least likely scenario at the present time because it would be so difficult to manage.
State-controlled France Telecom has been looking for a new international strategy since Deutsche Telekom walked out of their strategic alliance. France Telecom has said it is prepared to invest up to $5bn (pounds 3.2bn) in NTL.
Its initial $1bn investment is made up of $250m in ordinary stock and $750m in convertible paper, giving it 10 per cent of NTL's fully diluted stock.
Microsoft, which is poised to take a 29 per cent stake in Telewest, looks set to win whatever the outcome of the sale. because it also holds a 5 per cent stake in NTL.Reuse content