Telewest chief back at work as NTL merger rumours intensify

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The Independent Online

Barry Elson has returned to work as chief executive of Telewest after a successful fight against cancer, adding to expectations that the cable company could announce merger talks with rival NTL in the near future.

Barry Elson has returned to work as chief executive of Telewest after a successful fight against cancer, adding to expectations that the cable company could announce merger talks with rival NTL in the near future.

Mr Elson was forced to return to his native America last May, only three months after taking up the chief executive's reins in a hasty management reshuffle that followed the resignation of Charles Burdick, the former chief executive.

Mr Elson had been in line to become chairman of Telewest, succeeding Cob Stenham. In the event of Mr Burdick's departure Mr Stenham stayed on as chairman with Mr Elson agreeing to take the chief executive's job on an open ended "acting" basis. However, Mr Elson's battle against cancer meant that Telewest has in effect been run since May by Eric Tveter, its chief operating officer.

Mr Elson's return to work coincided with Telewest's completion of a £1.8bn refinancing four days before Christmas. Telewest and NTL have now completed financial restructurings and leading analysts expect merger talks to follow.

On the day of Telewest's recent refinancing announcement, Aryeh Bourkoff, at UBS in New York, said: "We continue to believe that an announcement regarding a merger with Telewest could occur as early as the first quarter. A merger could create significant value for NTL and Telewest shares."

Mr Bourkoff saida combined NTL and Telewest, forming a single UK cable company, would produce £200m in annual cost savings and synergy benefits. Both companies have so far refused to comment on merger plans.

The companies privately believe that a combination would be unlikely to provoke any regulatory intervention from the Competition Commission, which has permitted mergers between Granada and Carlton and GWR and Capital Radio. However, uniting the companies would add to pressure from rival telecoms operators who want access to the powerful cable networks operated by them.

NTL and Telewest presently offer a so-called "triple play" of pay-television, telephone and broadband internet access bundled together in one subscription package. Recent results from the companies show that cable's popularity is increasing among consumers despite the financial problems the groups have endured. Both are now in a position to concentrate on their marketing and customer service functions, which have been criticised in the past.

Although both companies operate in the UK, they have stock market listings on the US Nasdaq market. Having Nasdaq listings will make a merger simpler.

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