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Telewest up for grabs?
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March 22, 1999: 11:32 a.m. ET
U.K. cable company's stock surges after $49B Comcast-MediaOne deal
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LONDON (CNNfn) - Telewest shares soared over 7 percent in London Monday amid speculation that the U.K. cable company, valued at 5.4 billion pounds ($8.8 billion), is now in play following the $49 billion takeover of MediaOne by Comcast Corp.
Analysts speculated that MediaOne (UMG) might put its 29.9 percent stake in Telewest up for sale as a result of the Comcast (CMCSK) bid.
"We could see a wholesale restructuring across the board among telecom companies, and Telewest will be at the center of it," said one London-based analyst who asked not to be named.
Uncertainty over the future ownership of the holding comes on top of doubts over what will happen to a 21.6 percent interest in Telewest held by another U.S. telecom company, Tele-Communications Inc. , which was taken over by AT&T (T) last year.
Speculation is mounting that AT&T's link with U.K. giant British Telecommunications (BT.) will result in the sale of TCI's Telewest stake.
Analysts picked out two likely contenders for the 50 percent holding in Telewest, one of the three main cable operators in the U.K. Cable & Wireless Communications (CWZ), 50 percent owned by international telecom giant Cable & Wireless (CW.), is one likely bidder.
C&W's new chief executive Graham Wallace, the former head of the cable subsidiary, is known to want to add Telewest's network to that of the U.K.'s largest cable company. "Wallace has made no secret of wanting to tie Telewest up with Cable & Wireless Communications," said one source close to C&W.
The other likely bidder is Nasdaq-listed cable provider NTL (NTLI), which has aggressively expanded in the U.K. market.
Another consequence of the Comcast-deal is that it raises the possibility of a flotation of U.K. cellular operator, One2One, which is a joint venture between C&W and MediaOne.
"I suspect that if C&W could be convinced by their bankers that they could float One2One at a price that valued it at 10 billion pounds ($16.3 billion), and it was effectively MediaOne's stake that was going to get sold, they would do it," one analyst told Reuters.
Telewest's shares rose 7.37 percent to 254 pence. C&W was down 6 pence at 735 pence, while C&W Communications stock traded 1.64 percent higher at 681 pence.
--from staff and wire reports
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