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As NTL and Telewest Communications approach the end of their respective financial restructurings, analysts and investors are once again buzzing about the possibility of a merger of Europe's beleaguered cable giants.
In the past few weeks, NTL has completed a rights offering, secured a sizeable loan and begun marketing a high yield bond that could bring it GBP800 million in proceeds. Telewest, whose lighter debt load required less balance sheet triage, is once again soliciting new customers, and has enjoyed reasonable success with its broadband services. Given the light at the end of their respective tunnels, analysts say that the long-awaited union might finally take place - for better or for worse.
Bitter rivals throughout the telecom and media boom, NTL and Telewest spent a small fortune gobbling up smaller cable operators in an effort to be the undisputed market leader. Each has spent the better part of the last five years trying to repair the damage their sprees inflicted on their balance sheets. Each undertook a massive financial restructuring - NTL with the added protection of the bankruptcy courts. Now, with the end of the process in sight, their thoughts will be turning to growth in the face of competition from pay-TV operator BSkyB and former telecom monopoly BT Group.
"It's long been signalled that NTL and Telewest would be very interested in a merger, but they need to get their individual finances in order before that can happen," said Christine Johnson, a portfolio manager at Investec Asset Management in London. And with Telewest going through the closing phase of its restructuring and NTL on...