Takeover firms eye NTL

18-08-2006

Four private equity firms are considering a takeover bid against telecoms giant NTL, according to media reports.

Growing speculation that Providence Equity Partners, the Blackstone Group, Cinven and Kohlberg Kravis Roberts are considering tabling a bid totalling close to £10 billion has yet to be commented on by any of the parties involved.

Observers have suggested that the bid, £1 billion more than an offer rejected by NTL last year, is fairly high for the telecoms group still struggling to make the transition from being a single service provider to a broader base in three sectors of the telecoms industry.

NTL had been a telephone landline company until it bought Telewest Broadband in January and Virgin Mobile in April. The three-way merger is reportedly undergoing difficulties, although investors believe the change in business is worth seeing through in order to match similar expansions by other major plays in the UK telecoms market.

Meanwhile Sir Richard Branson, the owner of Virgin, is expected to use a sale to quit the minority stake of 10.6 per cent he currently holds.

He will benefit regardless from the integration of the Virgin brand onto NTL products later this year under a licensing agreement reached during the merger.

NTL shares closed up 8.7 per cent on the Nasdaq exchange following takeover bid speculation yesterday.


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