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December 31, 2005

NTL-Telewest Merger Receives Regulatory Approval

NTL Incorporated (NTLI) shares are rose sharply on Friday after the U.K. Office of Fair Trading cleared NTL's merger with Telewest Global (TLWT). Apparently, there are no restrictions on the merged company beyond the regulations already in place governing telecom and media policy in the U.K. The Office rejected all the arguments that the merger of the U.K.'s only two cable companies was anticompetitive.

This move clears the way for a first quarter 2006 closing for the merger. It also will lift speculation about private equity buying the merged company, as newspaper articles had mentioned that clearance from U.K. regulators was one of the things private equity groups were waiting on.

Separately, there is still no news on the status of the Virgin Mobile deal. NTLI will probably have to sweeten its offer to minority shareholders to get the deal done. I expect them to do that, but it is possible that Richard Branson could sell the rights to Virgin TV, while Virgin Mobile does not become part of the new NTLI. It is also possible that nothing will happen, which would be a disappointment to the market.

Posted by Steve Birenberg at December 31, 2005 08:04 PM in NTLI