Re: MSOs in Europe -- Telewest Acquiring Cable London/NTL Inc.
Thread,
Yet another deal in the works. And notice the bolded companies below. I see what is happening in Europe as another HUGE vote of confidence in the cable plant's tremendous value as a last mile broadband solution.
MikeM(From Florida)
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Telewest Shares Decline on Rights Offering, Cost of Acquiring Cable London
London, Aug. 26 -- Telewest Communications Plc's shares fell as much as 6.6 percent after the U.K.'s second biggest cable company by subscribers said it will issue new shares at a discount to help it buy Cable London Plc, analysts said. They also said the company paid too much.
The rights issue will help pay for Telewest's 428 million pound purchase of the 50 percent of Cable London it doesn't already own from NTL Inc., the U.K.'s biggest cable company. Steve Scruton, an analyst at HSBC Securities who rates the shares ``hold.' Added that 428 million pounds ``seems a pretty high price' for the Cable London business.
Microsoft Corp. and Liberty Media Group, which own 30 percent and 22 percent of Telewest shares respectively, have agreed to buy their shares of the rights offer as well as any other rights that aren't taken up by other shareholders, Telewest said yesterday.
Some analysts said Telewest appeared to have overpaid for Cable London in an effort to compete with NTL, which last month outbid Telewest for Cable & Wireless Communications Plc's cable business.
Under Pressure
``Telewest was under pressure to get the deal following the failure to secure CWC and it's had to pay a high price to do so,' said Christian Maher, an analyst at Investec Henderson Crosthwaite, who said he is recommending investors sell shares in Telewest following the Cable London purchase.
Telewest and NTL agreed last year to place Cable London under a single owner no later than September. Under the agreement, NTL had to set a price at which Telewest could choose to buy or sell its half.
Maher said the Cable London network, which passes about 400,000 homes in five boroughs in North London, would have been worth more to NTL, which will cover more London cable homes following its purchase of CWC. ``Most people are seeing the deal as quite expensive and the operational synergies for Telewest aren't immediately obvious,' he said. |
