Liberty Media scraps Telewest bond offer

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The Independent Online

Liberty media's attempt to influence the future of the UK cable company Telewest took another twist yesterday after it scrapped its offer to buy Telewest bonds and removed its representatives from the company's board.

It abandoned its bond offer, which was launched last month and due to expire tomorrow, thanks to falling equity markets and the "significant" fall in the value of its own stock.

The company, which owns 25.2 per cent of Telewest's shares and about 10 per cent of the company's bonds, had been keen to snap up more bonds to protect its investment if the company carried out a debt-for-equity swap.

"The continuing decline in world markets has caused us to review our priorities for additional investments. In the context of this review, we have concluded that Liberty Media's interests are best served by terminating the tender offer," said Robert Bennett, Liberty Media's president and chief executive.

In addition, the company also removed its three non-executive directors – Mr Bennett, Miranda Curtis and Graham Hollis – from Telewest's board.

"We are taking this action to eliminate any potential conflict of interest or appearance of a conflict in any upcoming restructuring discussions. The management and the remaining directors of Telewest continue to have our full support," Liberty Media said.

Despite the moves, analysts believed Liberty Media would continue to try and gain a controlling vote in any Telewest restructuring discussions by buying up bonds, which have fallen in value, on the market.

Telewest, which has some £5.3bn of debt, has already admitted that it is mulling its options to secure its future, including carrying out a debt-for-equity swap.

"We continue to hold our equity position and the bonds we have acquired separately and we look forward to working with Telewest and its debtholders to explore the possibility of a mutually agreeable restructuring," Mr Bennett said.

Last week, Liberty Media was forced to extend the deadline for its bond offer after a group of Telewest bondholders filed a lawsuit alleging it was illegal.