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Telecommunications industry

France Telecom Invests $1bn in NTL to Back £8bn Cable Bid

Strategic Insights

— 1 min read

French telecom giant France Telecom has invested $1bn in UK cable operator NTL, giving it a 10% stake, as part of NTL's planned £8bn bid for the residential cable assets of Cable & Wireless Communications. This move raises the prospect of a bidding war for CWC's assets, with Telewest, another major UK cable operator, also preparing to table a bid. The investment is seen as a significant boost to NTL's bid, with France Telecom's vice-president, Jean-Louis Vinciguerra, stating that the company would invest "many more billions of dollars" in taking a significant minority stake in the merged company if NTL's bid succeeds.

Key Takeaways:

  • France Telecom has invested $1bn in NTL to support its £8bn bid for CWC's residential cable assets.
  • The investment gives France Telecom a 10% stake in NTL and raises the prospect of a bidding war for CWC's assets.
  • Telewest, the other major UK cable operator, is also preparing to table a bid for CWC's assets, with backing from Microsoft and AT&T.
  • France Telecom's vice-president, Jean-Louis Vinciguerra, stated that the company would invest "many more billions of dollars" in the merged company if NTL's bid succeeds.
  • Telewest's major shareholders, Microsoft and AT&T, control 29.9% and 21.1% of the company respectively and are enthusiastic about a merger.
  • Cable and Wireless, which owns 53% of CWC, is expected to take full control of CWC's business operations as part of any deal.
  • Cable and Wireless is keen to complete its exit from cable and select a buyer for its assets as early as next week.

Statistics:

  • $1bn - France Telecom's investment in NTL.
  • 10% - France Telecom's stake in NTL.
  • £8bn - NTL's planned bid for CWC's residential cable assets.
  • 29.9% - Microsoft's stake in Telewest.
  • 21.1% - AT&T's stake in Telewest.
  • 53% - Cable and Wireless' stake in CWC.
  • $250m - France Telecom's investment in common stock.
  • $750m - France Telecom's investment in convertible bonds.
  • 261/4p - Increase in Telewest shares yesterday.
  • 3191/4p - Telewest share price yesterday.
  • 23.5p - Increase in CWC shares yesterday.
  • 720p - CWC share price yesterday.

Sources:

  • Financial Times Limited 1999.

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