US West already owns half of Telewest, the largest cable company in Britain. The US company last night said it would announce a major acquisition today.
The purchase is unlikely to involve buying full control of Telewest, since the UK company recently announced plans to seek a full listing on the Stock Exchange. Analysts say it could involve buying an unquoted company.
The flotation is expected to value Telewest at up to pounds 1.85bn. It plans to raise about pounds 350m by listing 25 per cent of its shares, which will also be quoted in New York.
Apart from Telewest, US West's other significant UK investment is its 50 per share in Mercury One- 2-One, the mobile service launched with Cable & Wireless.
Industry analysts are anticipating a surge in investment in the cable television industry. Estimates for new investment by the year 2000 range between pounds 7bn and pounds 10bn.
More than pounds 1.5bn has already been invested in the industry, mainly by American and other overseas firms. Investment this year will be pounds 1.2bn.
Spending is expected to accelerate with the Government beginning to advertise franchises for other parts of the country.
The City's interest in the sector in recent months has intensified, largely because of success by cable television companies in offering local telephone services.
Richard Woollam, Cable Television Association director, said cable companies were installing 25,000 telephone lines a month.Reuse content