Malone bids to keep up stake in Telewest

Liberty Media unveiled plans to tender for up to 20 per cent of Telewest's debt last night in a move that could help the US cable tycoon John Malone preserve his stake in the troubled UK operator.

Telewest warned investors at its annual meeting earlier this week that it could be forced into a debt-for-equity swap to secure its financial position. With the cable company's market value currently standing at £143m and its debts at more than $7bn, such a swap would see bond holders gain control of the company.

The tender offer, by a unit of Liberty Media, Liberty TWSTY Bonds, will stay open until 11 July. As an added incentive to get investors to cash in their bonds it will pay extra for debt tendered before 26 June. Liberty Media, Mr Malone's investment vehicle, already has a 25 per cent equity stake in Telewest although, like other shareholders, this would be heavily diluted if the company proceeds with a debt swap.

Earlier this week, Liberty representatives on the Telewest board sidestepped questions about whether it had already been buying up Telewest debt in the market.

Liberty Media has already failed in an attempt to buy up a significant amount debt in NTL, Telewest's cable rival in the UK, which is staging a $7.5bn debt-for-equity swap. Many analysts predict the two UK cable groups will eventually merge once they have resolved their debt problems.