NTL-Telewest Combo One Step Closer?

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NTL Inc. completed the sale of its Irish cable unit Monday -- a move that could be a precursor to a merger of the British MSO with the No. 2 cable operator in the United Kingdom, Telewest Global Inc.

NTL sold the Irish cable holdings to a unit of U.S. investment bank Morgan Stanley Dean Witter & Co., MS Irish Cable Holdings B.V., for about 325 million euros ($417 million). Morgan Stanley will then sell the Irish unit to a division of UnitedGlobalCom Inc., UPC Ireland B.V.

The sale of the Irish cable unit -- with about 384,000 analog- and digital-cable subscribers and 7,500 broadband-Internet customers in Dublin, Galway and Waterford -- had been anticipated for months.

NTL said it will use the proceeds of the sale to pay down debt.

According to some published reports, the deal paves the way for a merger between NTL and Telewest.

According to a report May 8 in London’s The Times, Telewest’s board of directors approved a merger with NTL last week, and NTL has hired U.S. investment bank The Goldman Sachs Group Inc. as an advisor in a possible Telewest merger. Telewest is reportedly talking with bankers in New York this week.

NTL is about twice the size of Telewest, with about 3.1 million cable and telephone subscribers in the United Kingdom, compared with 1.8 million for Telewest.

Estimates are that an NTL-Telewest deal would be worth about £5.5 billion ($10.4 billion).

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