Telewest Sits on Fence Over Liberty Bond Bid

26 June 2002

The board of debt-beset cable operator Telewest, meeting Monday night, declined to advise its bondholders whether to accept or reject the $350 million (€360.67m; £232.97m) offer on the table from Liberty Media, the investment vehicle of US cable billionaire John Malone.

Telewest’s directors believe they have insufficient information to decide whether the Liberty bid is “beneficial or detrimental” to bondholders. The deal has already been rejected out of hand by an unofficial committee of funds controlling a majority of Telewest bonds.

But this does not preclude other bond-holding funds from accepting Malone’s offer, sweetened until today (Wednesday) by an incentive of extra cash. Any last-minute sales would bolster Liberty’s existing bondholding (upward of 5%), which under UK law would allow Malone to influence the terms of Telewest’s anticipated debt-for-equity swap.

Liberty controls 25% of the equity in the UK-based company whose debt burden is currently running at around $3 billion.

Data sourced from: Financial Times; additional content by WARC staff