Telewest Buys Outstanding Shares of Cable London
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The UK's second largest cable company, Telewest Communications, has agreed to purchase from NTL the remaining 50 per cent of Cable London for £428 million ($680 million).
Earlier this month, Microsoft and Telewest announced a strategic alliance to deliver broadband and Internet services in the UK -- an alliance which is clearly being strengthened by Thursday's deal.
To pay for the acquisition, Telewest has organised a 1 for 11 rights issue at 213 pence per share, with Microsoft and Liberty Media agreeing in principle to take up rights (approximately 50 per cent of the issue) and underwrite the balance.
"This will significantly expand our footprint in the capital," said Tony Illsley, CEO of Telewest.
Cable London brings networks in the boroughs of Camden, Islington, Hackney and Enfield in the north and east of London, greatly expanding Telewest's footprint in the capital.
Although it has over 200,000 telephone and cable television customers, Cable London also has net liabilities of £23.6 million ($37.7 million), including bank borrowings of £115 million ($184 million). It generated sales of £70 million ($112 million) in 1998.