$600 mil deal gives NY co 1.6 mil Brit homes
LONDON – The consolidation of American ownership in the British cable industry has taken another step forward with the announcement that NTL Inc. has agreed to acquire Comcast Corp.’s U.K. cable operations for around $600 million.
The deal follows NTL’s recent attempt to line up a $1.3 billion bid for Telewest, the U.K. cable joint venture between US West and Tele-Communications Inc., which has yet to bear fruit. US West responded to NTL’s approach by initiating its own counter-move to buy out its partners in Telewest.
A plan for growth
New York-based NTL manages cable systems covering 2.2 million British homes, to which it will now add a further 1.6 million homes from Comcast. Comcast will receive NTL stock currently valued at $600 million, with assurances that the value will not fall below $500 million before the deal is completed.
NTL is also taking on Comcast U.K.’s outstanding debt of $397 million.
Barclay Knapp, chief exec and president of NTL, said, “This acquisition represents a significant step toward increasing the value of NTL and achieving our objective of becoming the premier communications company in the U.K. It has always been our strategy to look for acquisitions which are at attractive values, provide strategic benefits and do not increase leverage, and this transaction achieves all of our objectives.”
Brian Roberts, president of Comcast Corp., said, “While Comcast U.K. has been a leading performer in the U.K. cable and telephone industries, we have determined that long-term success in this market will require greater size and market presence than Comcast U.K. has in its asset base. After an extensive evaluation of strategic alternatives, we have concluded that our shareholders will be in the best position to take advantage of future growth in this market by owning shares in NTL.”