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Telewest to make a move on CWC

NTL also interested after France Telecom cash injection

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Cable & Wireless Communications (CWC) saw its shares jump six per cent as rumours circulated that the battle for the UK's largest cable company is intensifying. Banking sources indicated that Telewest Communications was seeking a loan to raise the £1 billion needed to fund an offer. Telewest's main competitor for CWC's affections is Britain's third cable group, NTL. The target company's share price ballooned on the back of the news, gaining 38 pence to close at 656 pence. This valued the company at about £10 billion. NTL share prices also rose slightly. "It looks like there's a bid battle developing over CWC between Telewest and NTL, which Telewest will probably lose because they haven't got enough cash," said one telecomms analyst, quoted by Reuters. Telewest stock was somewhat deflated, dropping over four percent to 286-1/2p. Market analysts were watching the brewing storm with some amusement, with the general feeling being that the best move for the companies would be a threesome, thus forming a company big enough to face BskyB and BT head on. "I'm working on the basis that sanity will prevail and the three of them will get together and form a major cable TV company sometime over the next six or nine months," said Nigel Hawkins, an analyst at Williams de Broe. In a separate announcement, it emerged that France Telecom is in talks with NTL about taking a minority stake in the company. France Telecom hopes to use a connection with NTL, to involve itself in deals with other UK companies. Neither company would speculate on the size of the stake or on its worth, but a spokesman for France Telecom confirmed that talks were underway, "...in order to facilitate the consolidation in the UK cable operators market." ®

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