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Thursday, 16 April, 1998, 16:47 GMT 17:47 UK
Telewest buys rival in 649m deal
Telewest logo
Telewest trumped rival NTL which was also seeking a deal with General Cable
Britain's second largest cable company, Telewest Communications, has announced it is to buy its smaller rival, General Cable for 649m.

Telewest had been in talks with General Cable since the end of March and trumped competitor NTL to secure the deal. The firm has been calling for greater consolidation in the UK's sluggish cable market.

General Cable logo
General Cable: pre-tax losses of 89m
The two loss-making companies hope the merger will help them cut costs and increase their competitive position. On Thursday General Cable announced pre-tax losses of 89m compared to 30m last year.

The new company will have 849,000 cable television customers and 1.1 million residential phone customers.

The takeover will see Telewest expand its territories in London and Birmingham and take the company into Yorkshire.

Gary Ames, chairman of Telewest and chairman designate of the enlarged group, said: "This is an excellent deal for the shareholders of both companies.

"The combination of Telewest and General Cable will produce a powerful force in broadband voice, video and data.

"The merger is expected to generate financial benefits from cost savings and operating efficiencies.

"We believe the combined group will be better positioned to take advantage of new product development and growth opportunities such as digital television and Internet access in a period of accelerating technological change."

The deal pushes Telewest closer to its number one rival, Cable and Wireless Communications, created by the merger of Mercury with Nynex, Bell Cablemedia and Videotron.

Telewest is raising around 214m with an open offer at 92.5p per share and offering 1,243 new Telewest shares and 65p cash for every General Cable share.

It is also offering 6,215 new Telewest shares and 325p cash for each General Cable American Depositary Share held.

See also:

02 Apr 98 | Business
Cable & Wireless to axe 1,500 jobs
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