NTL Acquires Telewest to Merge Operations

Monday, October 3rd 2005, 11:35 am

By: News On 6

LONDON (AP) _ NTL Inc. is acquiring Telewest Global, Inc. in a $6 billion (5 billion euro) deal to create Britain's second-largest communications company, the two firms announced Monday.

Telewest shareholders will receive $16.25 (13.51 euros) per share in cash and 0.115 NTL shares for each Telewest share.

Shares in Telewest rose 19 cents to $23.14 in early trading Monday morning on the Nasdaq Stock Market. NTL's shares fell 77 cents, or 1.2 percent, to $66.03 on Monday.

NTL and Telewest will issue bonds equivalent to 1.8 billion pounds ($3.2 billion) to finance the cash portion of the transaction, NTL Chief Executive Simon Duffy said Monday in a conference call with journalists.

The combined companies will have nearly 5 million residential subscribers _ with 4.3 million taking telephony services and 2.5 million using broadband _ and annual revenues of 3.4 billion pounds ($6 billion).

``This is a transforming transaction for the U.K. cable industry. It marks not just the culmination of a decade of consolidation but, more importantly, the creation of a new competitive force in the communications and entertainment sectors in the U.K.,'' said Duffy.

The merger climaxes a long and painful shakeout for the cable industry in Britain, where more than a hundred companies have dwindled now to just three _ NTL-Telewest and two regional operators.

The new company will be Britain's second-largest communications company behind British Telecommunications PLC, and the largest provider of residential broadband services.

As a television provider, the combine faces keen competition from satellite broadcaster British Sky Broadcasting and Freeview, a joint venture of the British Broadcasting Corp., Sky and Crown Castle International.