Telewest is to acquire General Cable for around #694 million, making the combined force the largest cable operator in the UK with 43 franchises.
The predator beat off competition from NTL, which was understood to have bid #500 million.
Already one casualty is Stephen Davidson, Telewest chief executive, who will ?step down? and be temporarily replaced by the company?s chief operating officer, David Van Valkenburg.
Eventually, Telewest?s majority shareholders, US West and Tele-Communications, will each own 20.9 per cent of the company, with Cox Communications and SBC, each holding 11.4 per cent. General Cable?s main owner, Compagnie Generale des Eaux wil own 8.5 per cent.
Consolidation of the cable industry is crucial if operators are to be considered as alternatives to BT for business users. Individual operators do not offer adequate network coverage. In a recent survey of 400 telecomms managers by Morgan Stanley Dean Witter, 42 per cent said they ?would not rule out? cable operators as suppliers. However, a thumping 90 per cent said suppliers need to address network coverage and quality.
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