Microsoft nets massive loss in Telewest sale
Microsoft has flogged its 23 per cent stake in UK cableco, Telewest, to US telecoms outfit IDT Corporation for $5m in cash, netting a massive loss on its investment.
The giant software outfit coughed up a whopping $2.6bn in stock three years ago for a slice of the UK's second biggest cable operator.
At the time Microsoft said that the investment created a "great opportunity...to help deliver new technology and services to consumers". That now appears to have been a tad optimistic.
News of the sale comes almost exactly a year after Microsoft pulled three non-executive directors from the cableco's board claiming it "would be in a better position to manage [its] relationship with, and investment in, Telewest without board representation".
Said Microsoft in May 2002: "Microsoft expects to continue to evaluate Telewest on an ongoing basis and, in that regard, will continue to consider, among other things, purchasing or selling Telewest securities or engaging in possible strategic transactions involving Telewest."
In July last year it was reported that Microsoft had offered to sell its stake in the company to Liberty Media for around £332m.
Telewest - which is currently in negotiating a £3.5bn debt-for-equity swap - has 1.3 million cable subscribers and 1.6 million residential telephony subscribers. ®