UK cable outfit NTL’s attempts to sell its wireless towers and satellite uplink business for up to GBP1.5 billion ($2 billion) has hit problems. Reports suggest that NTL’s favoured bidder remains France Telecom, already a major investor in NTL. But France Telecom is itself cash-strapped and will evidently pay no more than GBP1 billion, and that not in cash.
Jean-Louis Vinciguerra, France Telecom’s chief financial officer, said a week ago: “France Telecom does not intend to invest cash. It is not our intention to do a big acquisition in cash for the next two years. We have a high level of debt. We do not intend to increase it.”
The news, plus a Moody’s Investment Service downgrade of NTL’s to sub-junk bond status (Caa2), helped wipe out 44% of NTL’s share price on November 29. In January 2000 NTL had a market capitalisation of some $30 billion. Last week it was barely $570 million.
One other reported bidder for NTL’s ancillary business is the BBC through its BBC Technology division, which is said to be looking to team up with Texas-based Hicks, Muse, Tate & Furst to make a separate bid, which evidently would not include the profitable towers business, but concentrate on the satellite uplink segment.