NTL close to buying C&W.............................
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Friday July 23 12:19 PM ET
NTL Poised To Seal CWZ Deal - Source
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Telecom Industry News
By Kirstin Ridley
LONDON (Reuters) - NTL Inc (Nasdaq:NTLI - news), Britain's third biggest cable television company, is likely to unveil the first details of a merger with market leader Cable and Wireless Communications Plc next week, a source close to talks said Friday.
''I would be surprised if we didn't see any progress -- at least an outline of a deal -- in the next week,'' the source told Reuters. CWC declined to comment.
Top executives at CWC and NTL have spent the week ''in smoke-filled rooms'' trying to hammer out a deal that analysts expect to be the penultimate move in the consolidation of the country's Big Three cable groups.
NTL muscled into merger talks between CWC and Britain's second biggest cable company Telewest Communications Plc Monday, securing 21 months of exclusive negotiations with CWC's 53-percent shareholder Cable and Wireless Plc.
Analysts believe the extraordinary length of the exclusivity agreement might have been struck to ensure a highly complex deal can be not only agreed, but also completed. C&W also declined to comment. Nasdaq-listed NTL, the sharp shooter of Britain's cable industry, has been offering around 8.0 billion pounds ($12.63 billion) in cash and shares for the 1.2 million residential customers and cable assets of CWC, according to industry sources. But negotiations are continuing.
Analysts expect the corporate assets of CWC to be merged back with its parent C&W, which is keen for cash as it refocuses into a corporate data communications company and sells off some of its consumer-related businesses.
If a deal is agreed, analysts expect the enlarged group to also swallow Telewest in due course as the companies seek synergies of scale and enough market power to take on British Telecommunications Plc and pay-TV giant BSkyB.
Britain's top three cable groups are all saddled with a considerable level of debt. But NTL last week won a $1.0 billion investment from France Telecom (NYSE:FTE - news), which took a 10 percent stake.
The French giant, which has been keen to gain a foothold in Britain, has said it might raise its stake if NTL secures the bid for CWC. ($1-.6335 Pound)
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