£10 Billion Takeover of ntl:Telewest?

[orangebird]

Originally Posted by James Henry

I know enough Pierre to know that that route doesn't make sense. Going to the same router twice is totally illogical, the trip to Leeds just to come back to Northampton is wasted bandwidth.

Unfortunately as my knowledge of these things is based around technical stuff I have to put points across in that manner and I apologise if I excluded anyone.

OB - Congrats on your marriage, sorry I didn't bite

Many thanks. I wasn't wanting you to bite - I was being dead serious.

[James Henry]

Originally Posted by orangebird

Many thanks. I wasn't wanting you to bite - I was being dead serious.

I know you were, that's why I didn't lower myself to that level

Be interesting to see if anyone else ntl related appears to comment on this thread.

[sollp]

Just heard it again on the radio when coming home about this takeover, have heard rumblings about this before a few months ago, so i take it it is now gathering pace so won't belong before it happens.

Just hope this is good news and the investment will come flowing quickly.

This was mentioned last year.

Money firms sniffing around NTL/Telewest | The Register

[Taf]

NTL, the $8bn (£4.2bn ) cable company, has been approached about a possible takeover bid by a private equity consortium comprising Providence Equity Partners, Blackstone Group, Kohlberg Kravis Roberts and Cinven.

It is understood that the approach to the New York listed business was made in the past two weeks, but no formal offer has yet been made. NTL shares were trading 10pc higher at $26.89 last night, valuing the group at $7.9bn. It was speculated that NTL shareholders would want close to $30 a share. Market sources said an offer could be made before the end of this week.

Given the size of the bid, it is possible that other private equity groups, such as Texas Pacific or Apax, could be asked to join the consortium. Any bid would be an audacious move. NTL is struggling to see through a three-way merger with cable rival Telewest and Virgin Mobile. NTL shares had dropped 10pc this year.

Last week the chief executive Stephen Burch admitted that the merger integration was not proving easy as NTL reported its lowest quarterly broadband additions for about four years. Any sale would provide an exit strategy for Sir Richard Branson, who took 10.6pc of the group when he sold his majority stake in Virgin Mobile this year. Under new owners he would stand to maintain his lucrative licensing deal, which is set to see NTL rebranded as a Virgin company next year.

NTL rejected an advance from a private equity consortium this year. Management may prove more amenable this time given the escalating competition in the UK broadband market.

Private equity firms' interest in cable and telecoms operators has increased dramatically in recent months. Cinven last month teamed up with buyout firm Warburg Pincus to buy Casema, the third-largest Dutch cable TV company for €2.1bn (£1.4bn ). Blackstone took a 4.5pc stake in Deutsche Telekom in April and rumours of a possible private equity bid for BT continue to rumble.

All sides declined to comment last night.

[Chris W]

please add a link to your source of that news article that you have just copied

[James Henry]

This is VERY interesting indeed. I can't see Branson having a major problem with it either, he'll make a fairly big profit in a pretty short space of time.

EDIT: Indeed he agreed to vote with the board on any potential change of ownership.

---------- Post added at 18:55 ---------- Previous post was at 18:44 ----------

http://news.google.co.uk/news?q=ntl+...ab=wn&ie=UTF-8

[Chrysalis]

Originally Posted by Bob

According to more comments in the actual paper, the equity firms are more interested in its very valuable infrastructure and not its content

This is what I was about to ponder, ntl have a infrastructure that is potentially woth a lot of profit wholesale. I think they need to stop dealing with consumers direct and instead resell their services.

---------- Post added at 01:11 ---------- Previous post was at 01:08 ----------

Originally Posted by georgepomone

Hi All,
thanks Neil for posting that as we wouldn't have heard about this otherwise. I personally don't think Richard Bransons stake in the company would make any difference, he would still be there and maybe take an even bigger stake with different partners.
I still wonder what the attraction is because there is still the question of that big debt burden. What is it now? 5 Billion+,an awfull lot of money.I get the feeling that's why ntl keep going because nobody wants the debt burden.If there are offers forthcoming then they must have found a way round that.
At least ntl have kept the cable industry going.Good or Bad thing I don't know. My feelings for what it's worth are that if the industry becomes fragmented (split up). That could be the beginning of the end for cable.The point is what could be done now to save any money on running costs.Any savings to be done have been done by ntl and customers don't like it one bit.Far from upgrading the system it could gradually get even worse.
These Private Equity people are experts at asset stripping.Sell the good bits off at a big profit. Then land values etc. covers getting rid of the rest.
Who knows what will happen now.
George.

The problem is its stagnant, no expansion at all over the past years, not even upgrading all their areas to digital, whilst their has been BT expanding and LLU, LLU will soon overtake cable coverage.

---------- Post added at 01:16 ---------- Previous post was at 01:11 ----------

Originally Posted by King Of Fools

Energis have already used electricity transmission towers to create a UK wide fibre network and resell the bandwidth to companies like NTL for national calls.

There are not many places I know of that have telegraph poles so there would be very little point in putting fibre on these. Anyway the cost of the fibre is small compared to the cost of the street cabinets that convert from fibre to wire for the last few metres to the house.

It would be far cheaper to use LLU on present BT lines to reach a lot more people.

I really hope that would never happen it would put BT in a total dominent position that everyone pretty much relies on them for broadband.

For BT to be under any kind of pressure of fibre rollout they need competition on a technical level forcing it ie. cable. If cable in its present form had the same coverage as ADSL now BT would probably be rolling out FTTC.

---------- Post added at 01:17 ---------- Previous post was at 01:16 ----------

Originally Posted by Pierre

Incorrect, Telewests Change control procedures were the ones that were over the top, and also badly managed.

Yes, ntl's procedures are stringent, for major changes. Or would you prefer them to be done haphazardly and impact customers.

Minor changes can be implemented very swiftly, a matter of days.

Not what I heard, for example cogent had problems during my last month with ntl, guy I know at ntl was unable to reroute over abovenet because it would have had to be cleared with management and taken days/weeks to approve but the need was instant and cogent was resolved a few hours later.

---------- Post added at 01:19 ---------- Previous post was at 01:17 ----------

Originally Posted by James Henry

Really? What's your source for this?

Telewest's procedures were as described far more automated, much less convoluted and more efficient than the nightmare that was ntl's. People actually quit over ntl's mismanagement of network changes when they were forced to apply them to the Telewest networks.

Don't even get me started on the ntl operational model compared to the Telewest one either.

I remember ntl's change processes as I had the pleasure of dealing with them from time to time.

Your definition of major changes is probably somewhat different from mine as well. To fart in a hubsite on the former CWC network required permission from the DTV change board.

So do you deny that despite Telewest's over the top change control procedures changes identified and required for both networks as part of upgrades, same number of changes on both, were forecast to take 6 weeks on the Telewest network, following Telewest change control, and 6 months on ntl's following their process?

I think you're completely wrong frankly, stop sucking in what ntl's empire defending sycophants tell you about how much better ntl's system is than Telewest's.

Which network ran dual DOCSIS since middle of last year, 16QAM since early last year, and finished the 256QAM upgrades which ntl are currently patting themselves on the back and procrastinating over because of what the text books say last year?

One company's change control dealt in reality, the other is a load of people sitting behind desks who probably have no idea what most of the stuff going infront of them actually means.

also telewest have a schedule to fully digitalise their service coverage ntl do not.

[Neil]

Originally Posted by Chrysalis

also telewest have a schedule to fully digitalise their service coverage ntl do not.

Not only that, but Telewest have had that information on their website for at least a couple of years.....

[popper]

Originally Posted by Pierre

It could be easily stripped down to at least 3 companies.

Consumer and Business

Networks and Carriers

Mobile.

as easy as it may seem, that would in effect take away the one thing that makes the current NTL:TW so attractive to the bidders, that being the fact the NTL is now the only UK incumbent cable owner.

if for any reason they (assuming the buyout works )were to float the current NTL:TW into seperately owned companys then that instantly takes away the power that UK incumbent label gives them, and they would not spend that vast amount just for short term profit alone, their in it for the longhaul.

the truth is, its not just about money and profit, its about power over the whole UK market, as has been seen many times by the likes of sky and BT.

Taf quoted from somewere ?:
NTL, the $8bn (£4.2bn ) cable company, has been approached about a possible takeover bid by a private equity consortium comprising Providence Equity Partners, Blackstone Group, Kohlberg Kravis Roberts and Cinven.

what do the readers know about these companys?, were are they based, is branson a board member or associated with of any of them?.

is there a prospect that a successful takeover would have NTL:TW delisted on the US markets and have the listing moved to the UK markets?.

Originally Posted by James Henry

This is VERY interesting indeed. I can't see Branson having a major problem with it either, he'll make a fairly big profit in a pretty short space of time.

EDIT: Indeed he agreed to vote with the board on any potential change of ownership.

---------- Post added at 18:55 ---------- Previous post was at 18:44 ----------

http://news.google.co.uk/news?q=ntl+...ab=wn&ie=UTF-8

taking a look through your search links , find this interesting, the key point being this
http://business.timesonline.co.uk/ar...318345,00.html
"

An opening bid of $30 share from a private equity consortium would mean that he would cash out at least on a par with the minority shareholders, plus he would continue to reap the benefits of licensing the Virgin brand.

NTLââ‚Âà ‚¬ÃƒÂ¢Ã¢â‚¬Å¾Ã‚¢s board, however, were aware that Sir Richard might be looking to make a fast buck and insisted that the sale included a clause that Sir Richard could not back a private equity bid against the wishes of the NTL management."

but if the NTL managment did bless a bid, he could, so does he have a plan?, thats the question!.

not that i think Branson would sell off his ntl shares after such a short time and given that he purposefully took a cut in his share price compared to the others and he doesnt do that without a good reason, unless he's in the position to know about any planed floating off of the whole into several companys.

you dont build up your big gun, aim it at the likes of SKY, then sell off its amo and run away as it were.

http://www.dtg.org.uk/news/news.php?...ss=193&id=1868

my bolding:
"Aggrieved ntl investors are set to write to chief executive Steve Burch to lodge a complaint regarding the cable company's rejection last year of a £9bn takeover bid, as a new offer is expected for the business.


According to a report in The Times, four unnamed private equity groups are considering a £10bn offer for ntl, which recently completed a £3.4bn takeover of rival Telewest, while unspecified key investors prepare to officially express in writing their dismay at the company's refusal to entertain an approach from private equity groups in 2005.

At that time, ntl claimed that the offer undervalued the business, which, the company said, would be able to provide better value to shareholders by remaining an independent concern.

According to the newspaper article, disgruntled investors will demand to know why last year's $32-a-share bid was rejected out of hand. They will also insist that ntl seriously considers all future approaches.

The Times goes on to report that the latest bid is dependent on the cable company's share price falling below its current $24.42 level set by Wall Streetââ‚Ã⠀šÃ‚¬ÃƒÂ¢Ã¢â€šÂ¬Ã‚ÂÂ�the same as when the merger with Telewest was finalised.

Earlier this month, The Times claimed that ntl had declared itself open to an £8bn private equity bid, after admitting fierce competition caused it to lose 18,900 customers in its second quarter to 30 June.
Lovelace Consulting | 16.08.2006"

http://business.timesonline.co.uk/ar...315194,00.html
"
A poor set of second-quarter results last week, in which NTL unveiled a sharp drop in customers and gave warning of further poor performance, also rattled investors.

It is unclear whether the private equity firms currently circling NTL are the same ones that approached the cable group last year. Investors are aware, however, that any fresh approach is likely to be pitched at a much lower price than last yearââ‚ ¬Ã¢â€žÂ¢s approach, in light of the groupââ‚ƚ¬Ã¢â€žÂ¢s performance and the increasingly competitive UK market."

and lets not forget NTL are very good at going bankrupt, from the not so wayback machine
http://www.leftbusinessobserver.com/Telecoms.html
"July 2002
At the drain

Every day, another telco contemplates chapter 11. Every few weeks, one winds up in bankruptcy court. NTL and Metromedia Fiber went bankrupt in May. NTL became the second largest telecom bankruptcy with $16.8 billion assets, before being bumped to third place by Adelphia Communications in June. "

[James Henry]

EDIT: Never mind:

http://www.lse.co.uk/FinanceNews.asp...keover__report

Contracts signed between Branson and NTL at the time mean he can vote his shares against any change of control even if recommended by the rest of NTL's board, where Virgin has one director. But he cannot assist a bidder by offering his shares for a deal opposed by the board, the newspaper said.

[popper]

hmm, who edited my 4 posts into one without leaving a note saying so?.

i thought it was easyer to read over the 4 posts even if i assume the messageboard was playing up and we cant normally post like that without waiting for someone to reply.

im the one that wrote them and even im now struggling to find the starts and finishes

it would be nice if we could use seperate mutiposts.

[Taf]

Originally Posted by Chris W

please add a link to your source of that news article that you have just copied

OOPs!

http://www.bloomberg.com/apps/news?p...d=ab0EB4DsI3iA

[popper]

Originally Posted by James Henry

EDIT: Never mind:

http://www.lse.co.uk/FinanceNews.asp...keover__report

Contracts signed between Branson and NTL at the time mean he can vote his shares against any change of control even if recommended by the rest of NTL's board, where Virgin has one director. But he cannot assist a bidder by offering his shares for a deal opposed by the board, the newspaper said.

i read your link
"LONDON (AFX) - The buy-out team that has made a 10 bln stg-plus approach to NTL's management has not yet won the backing of Sir Richard Branson and Bill Huff, the cable group's two most important shareholders,"

and wondered who this Bill Huff was and found this small section from a finantial mag
https://www.keepmedia.com/Auth.do?ex.../1031/114.html
"Don't Mess With Bill
By Dyan Machan | Oct 31 '05


Why dealmakers and target companies hate money manager William Huff.
Time Warner and Comcast had to pay a bit more than they wanted for the disgraced Adelphia Communications Corp.

The final price tag for the nation's number five cable operator was $17.6 billion--perhaps $1 billion or more than it might have cost the buyers had it not been for a certain troublemaker named William Huff.

Huff buys the debt of distressed companies, and he had a crucial slice of Adelphia's.

"In this stupid world of 'Let's make a deal,' I say 'No,'" explains Huff, 55,"

that linked off this story
http://www.forbes.com/business/2006/...n_0816ntl.html

"London -
Rather like coal-powered cars, New Coke and the Spice Girls' fourth album, the merger between the British cable-television providers NTL and Telewest must have seemed like a good idea at the time.

The combined companies formed an entity that now has nearly 5 million residential subscribers and annual sales of 3.4 billion pounds (nearly $6 billion) and is Britain’s leading "triple-play" service provider--offering a three-way service bundle of voice-over-Internet Protocol services, broadband Internet and cable TV/video-on-demand.

Yet the new company's shares have fallen 20% over the past four months as it struggles to demonstrate the benefits of its recent amalgamation.

Now there are news reports that four private equity firms are preparing a fresh 10 billion pound ($18.9 billion) bid for NTL (nasdaq: NTLI - news - people ) as shareholders lodge a formal complaint against the company's rejection of a 9 billion pound ($17 billion) offer last year.

A bid will come if the Nasdaq-listed NTL's share price falls below its Tuesday closing level of $24.42, The Times reported.

It adds that a complaint letter, backed by at least two unnamed "key" NTL investors, will demand that Chief Executive Steve Burch seriously consider any future offers for the cable group.

It will also ask why last year's $32 a share approach--which represented a hefty premium to the company's share price--was pooh-poohed.

An NTL spokesman told Forbes that the story in The Times was a "purely speculative piece."

Perhaps in that spirit, NTL’s shares were up more than 3% in early Nasdaq trading, gaining 82 cents to $25.24.

Last year it was reported that Kohlberg Kravis Roberts and Providence Equity Partners joined with the Blackstone Group and Cinven to launch a formal bid for the merged NTL-Telewest entity. Yet Bill Huff, the Morristown, N.J.-based fund manager (see: " Don't Mess With Bill") who is NTL's largest individual shareholder, was reported to have declined an approach to sell his stakes in the two companies.

It is unclear whether the private equity firms eyeing NTL are the same ones that approached the cable group last year. However, The Times points out that any fresh approach is likely to be at a much lower price than last year's approach, in light of NTL's recent sluggish performance.

In April this year, NTL announced a 962 million pound ($1.82 billion) friendly offer for billionaire Sir Richard Branson's Virgin Mobile. The deal includes a 30-year exclusive branding agreement that will see NTL adopt the Virgin name across its consumer operations as it merges operations with Telewest. The takeover was completed in early July, leaving Virgin as a 10.6% shareholder.

RiverSource Investments, Franklin Mutual Advisers, W.R. Huff Asset Management and Fidelity Management & Research all hold between 6% and 9% of NTL. "

http://biz.yahoo.com/t/82/554.html
with that bolded quote of his above, and the fact that apparently he got his shares
very recently, is this a good or bad thing for the end users?.

"3-Mar-06 *464,323 NTLI Acquisition (Non Open Market)
* Indicates that some (or all) shares are held indirectly (e.g. in a trust, by a spouse, etc.)"
as are all his shares listed there.

and heres some of the daily closes for ntl
http://chart.finance.yahoo.com/d?a=&...006&g=d&s=ntli
Date Open High Low Close Volume Adj. Close*

Aug-17-06 26.40 27.17 25.21 26.13 11,003,800 26.13

Aug-16-06 25.85 27.19 24.55 26.55 15,721,100 26.55

Aug-15-06 23.18 24.53 22.90 24.42 3,157,000 24.42

Aug-14-06 23.75 23.75 22.97 23.01 2,134,800 23.01

Aug-11-06 22.83 23.51 22.83 23.48 1,287,200 23.48

Aug-10-06 22.79 23.17 22.45 22.76 1,761,900 22.76

Aug-09-06 21.94 23.24 21.71 22.78 2,680,700 22.78

Aug-08-06 21.84 22.32 20.83 22.02 3,081,200 22.02

Aug-07-06 22.27 22.59 21.56 22.41 1,606,600 22.41

Aug-04-06 23.14 23.14 22.20 22.24 1,166,000 22.24

Aug-03-06 23.65 23.65 22.65 22.82 1,316,800 22.82

Aug-02-06 23.03 23.69 22.95 23.60 1,372,700 23.60

Aug-01-06 22.75 23.26 22.51 23.18 2,855,400 23.18

Jul-31-06 23.11 23.19 22.51 22.85 2,528,800 22.85

Jul-28-06 22.75 23.28 22.58 23.22 1,513,800 23.22

Jul-27-06 22.30 22.66 22.14 22.55 1,522,100 22.55

Jul-26-06 22.12 22.53 21.80 22.39 1,626,000 22.39

Jul-25-06 21.81 22.26 21.69 22.11 1,850,400 22.11

Jul-24-06 21.04 22.33 20.99 22.23 2,261,700 22.23

Jul-21-06 21.30 21.56 19.99 21.02 6,651,800 21.02

[handyman]

Originally Posted by Chrysalis

This is what I was about to ponder, ntl have a infrastructure that is potentially with a lot of profit wholesale. I think they need to stop dealing with consumers direct and instead resell their services.

I think that would be the worst thing for the cable customers. While ntl may have their faults at least if you call to report a dtv fault you get through to someone that works at ntl, imagine that having to get passed to ntl by a third party and even worse if that third party had a Mumbai call centre.

From working for Freeserve BB an my own experience as a consumer I can say that customer service gets worse as the buck gets shifted between the reseller and the network owner.

Ntl really need to get someone to come in and kick things into touch. Despite several internal restructures no one seems to know how to put out quality customer service and to communicate effectively with the customer base.

Well trained, well informed customer service/faults teams will result in fewer reported faults. I think that it's possible to remove the IVR and set-up and initial enquiry service desk that could route the calls to Telco,bb,dtv faults and customer service teams. Apply number sensing software that would auto route calls in outage areas to an IVR to establish if the calls was fault related and you would have a service using fewer staff generating higher quality.

well as long as who ever dont change to much ie putting prices up I couldnt give a flying duck