Telewest talks to Comcast UK about takeover

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The Independent Online
Telewest, the country's second-largest cable operator, is in talks with rival company Comcast UK that could lead to an agreed takeover within weeks.

The move, which follows last month's four-way cable merger between Mercury, Nynex CableComms, Bell Cablemedia and Videotron to form Cable & Wireless Communications, now the country's largest operator, came as no surprise to analysts last night.

"Telewest was always going to be involved in the next wave of consolidation," said one media analyst. "And it was very likely to be an acquirer."

A spokesman for Telewest said: "We have no comment on any plans to acquire, merge or take over any company." Sources at Comcast also declined to comment.

Comcast shares rose 8 per cent in early trading on Nasdaq yesterday, in part on the company's improving financial performance.

Analysts said word of Telewest's interest had also percolated through the market.

Telewest shares cable franchises with Comcast in London, and has jointly developed marketing campaigns with the smaller company.

Comcast has 228,000 cable television subscribers and 239,000 residential telephony subscribers. It has investments in four franchises, including London, Cambridge and Birmingham, with a total potential reach of 1.6 million homes.

Analysts said last night that Comcast was an obvious target for Telewest, because of the franchises the companies shared. They said that Telewest had been keen to regain the initiative in the cable industry, following the C&W deal which pushed Telewest into second position in the market.

General Cable, which is also thought to be a likely takeover target, could also figure on Telewest's wish list, although it is expected to fetch a higher price because it owns its franchises outright.

Telewest recently indicated it intended to take a leading role in developing the cable television market in the UK, following its agreement to support the rest of the industry in rejecting the controversial rate card offered by BSkyB for the supply of pay-television programming.

Telewest is believed to be leading preparations for the launch of pay- per-view movies on cable, in direct competition with BSkyB, which has well-developed plans for its own PPV movie service.