NTL withdrew its original offer in April after concluding that the Department of Trade and Industry would intervene as it did to block BSkyB's bid for Manchester United. However, Stephen Byers, Secretary of State for Trade and Industry, has since suggested that he would not stand in the way if NTL resumed its interest in the quoted Premier League football club. Sources close to NTL said that the Nasdaq-quoted company will proceed with the bid.
NTL already holds 6.3 per cent of Newcastle shares and previously had an option to purchase the 50.7 per cent held by Cameron Hall Developments. Douglas Hall and Freddy Shepherd, the directors who control the majority of Newcastle shares, are still considered to be ready to sell up. The pair have never recovered from the mauling they received from Newcastle fans after a tabloid newspaper secretly filmed them making disparaging remarks about supporters and players.
The bid would be welcomed in the City, which has viewed Newcastle with suspicion in part because of the large proportion of shares controlled by Hall and Shepherd. Since floating in 1997, the shares have fallen from a peak of 140p to Friday's close of 69.5p, valuing the club at pounds 100m. NTL's original bid was worth 111.7p a share.
Football financiers believe that the DTI is ready to clarify the Monopolies & Mergers Commission's report into BSkyB's aborted bid for Manchester United, which initially appeared to place a blanket ban on media groups owning football clubs. Although Mr Byers is expected to preclude BSkyB from buying a club, on the grounds that its control of the pay-TV market is too strong, acquisitions by other companies will be shown the green light.
A spokesman for NTL said yesterday: "If Byers comes out and gives us an olive branch, we would look at it very seriously."
Sources indicate that NTL's interest has not been affected by the ongoing talks with rivals Telewest and CWC, designed to produce a single cable operator to take on digital providers SkyDigital and ONdigital.
NTL will be hoping to take advantage of a judgment by the Restrictive Practices Court, which is next month expected to respond to a complaint from the Office of Fair Trading about Premier League TV coverage. OFT director-general John Bridgeman believes that BSkyB's contract is depriving viewers of Premier League action and the RPC's verdict is expected to give other media groups the opportunity to show live top-division football.
The NTL spokesman said: "The reason for going down the Newcastle route was to increase the competition in the TV sports rights market and provide more matches and choice."
NTL's cable franchise serves households in Teesside, East Anglia and parts of the West Country, Scotland, Northern Ireland and South Wales. The pounds 3.8bn company, chief executive Barclay Knapp, also backs up Virgin's internet operations and has interests in France, Australia and Singapore.Reuse content