NTL / Telewest

Telecom operator NTL unveiled on Monday a 6.0-billion-dollar (5.0-billion-euro) recommended takeover of smaller rival Telewest, creating the second-biggest telecoms company in Britain.

The new group, which will cater for almost five million television and Internet subscribers, will be better placed to compete with market leader BT Group and satellite broadcaster BSkyB.

The deal ends months of speculation over a tie-up between the two groups, which are both listed in New York.

Under the terms of the approved takeover, Telewest investors will receive 16.25 US dollars in cash and 0.115 shares of NTL stock for each share they own, NTL said in an official statement.

Telewest shareholders will be left with 25-percent stake following the transaction, which values the smaller group at 23.93 dollars per share, or around 6.0 billion dollars.

The enlarged company will be Britain's largest individual provider of residential broadband Internet services with 2.5 million subscribers, and will be the second-biggest pay TV group with 3.3 million customers, NTL said.

The group would also be Britain's leading triple play service provider, offering telephone, Internet and television services in one package.

The takeover would lead to total cost savings of 1.5 billion pounds after integration costs, NTL added. By reducing its cost base, NTL expects an improvement in annual cash flow of some 250 million pounds by 2009.

NTL shares closed at 66.80 dollars per share on the Nasdaq exchange on Friday, while Telewest closed at 22.95 dollars.

NTL, based at Hook in Hampshire, southern England, emerged from bankruptcy protection in 2003 and began a major financial overhaul to generate new capital and reduce interest repayment charges.

NTL generated 2.1 billion pounds of revenues last year compared with the 1.3-billion-pound turnover of Telewest.

(c) Agence France Presse


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