Telewest closer to winning C&W cable battle

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The Independent Online
THE BID battle over the residential cable network of Cable & Wireless intensified last night when sources close to Telewest Communications, the country's second biggest cable network operator, said talks with CWC were "quite far advanced" and could result in a deal by next week.

Telewest has been in talks to acquire CWC's residential business since the Spring.

It also emerged that Telewest's biggest shareholders, Microsoft with a 29.9 per cent interest and Liberty Media with 20 per cent, are prepared to provide cash to seal a deal. Microsoft has balance sheet reserves of $20bn, while Liberty, now part of AT&T, has a $5bn cash war chest.

Telewest's intervention coincided with news last night that France Telecom has agreed to pay $1bn for a 10 per cent stake in NTL, the number three cable operator. Jean-Louis Vinciguerra, executive vice president of finance, said France Telecom is prepared to invest an additional "few billion dollars" in a rival cash and stock bid for CWC assets.

Should it succeed, France Telecom will enlarge its NTL holding to become the largest shareholder, although Mr Vinciguerra said it would not end up with a majority stake.

He refused to confirm reports NTL would be backed by the French company with sufficient cash to fund an pounds 8bn bid. Analysts had valued CWC's residential network at pounds 6bn.

France Telecom has $3bn in cash reserves, but expressed readiness to borrow, either short-term bridging funds or issue bonds. "A few billion dollars is not a key issue for France Telecom," Mr Vinciguerra said. The French company also has a 2 per cent stake in Deutsche Telekom worth $2bn that it intends to sell.

"(NTL) has very strong and aggressive management," he said, commenting on why France Telecom would back Barclay Knapp, the US entrepreneur who is NTL's chief executive.

"The idea for France Telecom is to have access to the second local loop," he said, referring to the line that connects homes and businesses to telephone companies' trunk network. "It's exactly what AT&T did in the US when it bought cable companies."

Outlook, page 21

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