Telewest and NTL to merge

CABLE companies NTL and Telewest are set to announce plans for a £6.8 billion (€10.06bn) merger by the end of the summer, it was reported yesterday.

It is understood that NTL, which recently sold its Irish operations, will make a cash and shares offer for Telewest before the summer is out, and possibly as soon as the end of this month.

The two groups, which are both listed on the US Nasdaq Index, have long been linked as likely tie-up partners, with a combined group better placed to take on bigger rivals such as BSkyB.

It is thought that Simon Duffy, NTL’s chief executive, will head up the new combined group, while chief executive of Telewest Barry Elson will become non-executive chairman.

Investment bank UBS has predicted NTL will offer £13.58 (€20.09) per share for its rival, valuing the company at almost £3.33bn (€4.93bn).

Shares in Telewest closed at £12.85 (€19.01) last Friday, while those in NTL ended the week at £38.89 (€57.53).

The companies, which offer telephone and broadband services and cable television, cover different areas of Britain so it is thought unlikely that the move would be blocked by the Competition Commission.

It is thought the combined entity would be able to make savings of around £200 million a year, offering services to around 50% of the British population.

An NTL spokesman said the company did not comment on press speculation.

No one from Telewest was available to comment.

Earlier this year NTL announced that losses from its continuing operations had narrowed, while revenues of £517.3 million (€765.3m) were nearly 1% ahead of a year ago.