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Microsoft in $4B cable deal?
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May 12, 1999: 5:24 a.m. ET
Software giant said to seek up to 30% stake in Cable & Wireless TV unit
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LONDON (CNNfn) - Microsoft is seeking to further its influence in the British pay-TV market by seeking to grab a 30 percent stake in Cable & Wireless's cable TV unit for more than $4 billion, according to a press report Wednesday.
Microsoft Chief Financial Officer Greg Maffei spoke with C&W Chief Executive Graham Wallace Tuesday, according to The Wall Street Journal, citing people familiar with the discussions.
Those sources said a deal isn't imminent however, although reports of a deal were enough to send shares in the C&W unit, Cable & Wireless Communications (CWZ) soaring more than 4 percent to 657 pence in London Wednesday.
Last week Microsoft (MSFT) acquired a 30 percent stake in Telewest (TWT), Britain's second-largest cable TV operator behind CWC. The Seattle-based software giant spent $500 million on a 5 percent holding in NTL (NTLI), the third-ranked player, in February.
The Journal said Microsoft is seeking to use its huge cash resources to sign up key customers for its software, attempting to fight off competing products from rival Network Computer Inc. Network Computer's main shareholders are Oracle (ORCL) and America Online (AOL).
In London Wednesday Cable & Wireless (CW.) stock slid more than 2 percent to 824 pence. The company announced a 17 percent drop in pretax profit to 1,822 million pounds ($ billion) for the year to March 31, and warned of difficult trading conditions at its crucial Hong Kong subsidiary, Hongkong Telecom.
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