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Liberty drops Telewest bid

Co. also pulls three directors from cabler's board

LONDON — Liberty Media has dropped its bid to take control of troubled U.K. cabler Telewest by buying 20% of its bonds.

In June John Malone’s cable giant, which owns 25% of Telewest, offered to buy the bonds for £223 million ($350 million), which would have put Liberty in a strong position when Telewest restructures its $8.3 billion debt.

Liberty has also pulled its three directors from Telewest’s board. Telewest’s fate now rests with its bondholders, some of whom had been trying to block Malone. The bondholders are expected to take control of the company through a debt-for-equity swap.

“The continuing decline in world markets has caused us to review our priorities,” said Liberty Media CEO Robert Bennett. “We have concluded that Liberty’s interests are best served by terminating the tender.”

But the cabler already owns 10% of Telewest bonds, and some suggest the conglom could be waiting to buy more bonds at an even lower price.

The U.K.’s other cabler, NTL, is skedded to emerge from its $17 billion debt restructuring in September.