08 August 2000

Pan-European cable giant UPC yesterday emerged as a possible bidder for Telewest Communications in which it already holds a 25% stake.

Telewest, Britain's second largest cable network (after NTL), has become vulnerable to takeover after its recent revelation of high churn rates and serious delays in rolling-out its digital service [WAMN, 4-Aug-00]. This led to an 11% plunge in its share price to 160p, compared with last March's high of 563p.

Dutch-based UPC, which last month merged its broadband internet service Chello Broadband with America's Excite@Home [WAMN, 19-Jul-00], is not the only predator eyeing Telewest. US private equity firm Callahan, which owns ONO in Spain and the Numericable network in France, is also rumoured to be interested.

The wild card in the takeover pack is Microsoft, which holds a 23.6% stake in Telewest and could scupper any bid it deems unwelcome. Its own ambitions for Telewest are now limited after agreeing at the behest of the European Commission not to seek joint control alongside fellow shareholder US media group Liberty Media [WAMN, 10-Jul-00].

News Source: CampaignLive (UK)