Debt-beset US owned cable group Telewest announced late last week its intention to dispose of the 17% stake it holds in SMG (Scottish Media Group), the similarly cash-strapped British media conglomerate.
The move was instigated by Telewest’s new managing director (and former financial director) Charles Burdick, who sees SMG as a “non-core asset” and a lot less sexy than ready cash.
Analysts believe the stake will be attractive to investors, the more so since SMG’s share price fell last week by a vertiginous 25%. Opined one entrail-raker: “A 17% stake in SMG will be of huge interest to the market.”
Although staggering under a £380 million ($581.71m; €598.19m) debt millstone, SMG will not allow itself to be hustled into reducing its financial obligations, insists chief executive Andrew Flanagan: “If there is no advertising recovery, we may need to sell something to cut our debts. But we are not going to be rushed into hasty decisions.”
The “something” most likely to be sold is the group’s TV assets – Scottish Television, Grampian Television and a 20% stake in ITV breakfast-time licensee GMTV – valued by SMG at around £480 million – or nearly six times the group’s total current market value [WAMN: 23-Jul-02].
Data sourced from: Media Week (UK); additonal content by WARC staff