RNS Number:5614E
Telewest Communications PLC
27 January 2000
Not for release, publication or distribution in or into Canada, Australia or
Japan
Proposed recommended merger of
Telewest Communications plc and Flextech plc
Highlights
* Proposed creation of an integrated communications and media group
focused on delivering a range of voice, video and interactive services
across multiple platforms, underpinned by branded digital media content.
* Merger to be achieved through a recommended offer by Telewest of 3.78
new Telewest shares for each Flextech share.
* Assuming full acceptance of the Offer, existing Telewest shareholders
will own approximately 80 per cent. and Flextech shareholders
approximately 20 per cent. of the merged group.
* Cob Stenham to be independent non-executive chairman; Adam Singer to be
chief executive officer of the merged group; Tony Illsley to be group
managing director.
* Commitment to accept the Offer (subject to certain tax protections)
received from Liberty Media in respect of approximately 37 per cent. of
Flextech's issued share capital.
* Irrevocable undertakings from Liberty Media, MediaOne and Microsoft to
vote in favour of any Telewest resolutions proposed in connection with
the Offer.
* Posting of Offer Document pre-conditional on SEC clearance of the offer
documentation.
Cob Stenham, Chairman of Telewest, said:
"I am delighted at this merger. Both companies already know each other well
and recognise the potential of the digital future. Together, we believe that
we will have the scale and capability to realise that potential."
Adam Singer, Chairman and Chief Executive of Flextech, said:
"Together we have the opportunity to seize the future by creating a new type
of company for the digital age. As a truly integrated digital media group,
it will have the scale, sophistication and the cross-promotional power to
navigate its customers around the digital world. What could be more exciting
than that in this first year of a new century?"
Tony Illsley, Chief Executive of Telewest, said:
"This merger is an important strategic step for Telewest. It will bring
together Telewest's advanced broadband distribution platform and product
range with Flextech's strong content and rapidly growing interactive
capability. The merged group now has the potential to take the lead in the
rapidly evolving broadband market."
This highlights section should be read in conjunction with the remaining
sections of this announcement.
27 January 2000
_____________________________________________________________________________
Press enquiries:
Telewest 01483 750900 Flextech 0171 299 5000
Cob Stenham Adam Singer
Tony Illsley Brent Harman
Charles Burdick John Murray
Schroders 0171 658 6000 CSFB 0171 888 8888
James Steel Gillian Sheldon
Paul Staples
Citigate Dewe Rogerson 0171 63 Brunswick 0171 404 5959
8 9571 Alison Hogan
Anthony Carlisle
___________________________________________________________________________
Not for release, publication or distribution in or into Canada, Australia or
Japan
Proposed recommended merger of
Telewest Communications plc and Flextech plc
Introduction
On 17 December 1999, Telewest and Flextech announced that merger discussions
between their two companies were at an advanced stage and that the parties
were contemplating a recommended merger of the two groups. The Boards of
Telewest and Flextech now announce that the terms announced on 17 December
have been confirmed.
Accordingly, subject to the satisfaction of the pre-condition referred to
below, Telewest intends to make an offer to holders of Flextech shares on the
following basis:
for each Flextech share 3.78 new Telewest shares
Based on Telewest's closing share price of 377.75 pence on 26 January 2000,
being the last dealing day prior to this announcement, the Offer values
Flextech's issued share capital at approximately #2.26 billion and values
each Flextech share at approximately 1,428 pence.
Rationale for the merger
The combination of Telewest and Flextech will create an integrated
communications and media group focused on delivering a range of voice, video
and interactive services across multiple platforms, underpinned by ownership
of branded digital media content.
The Boards of Telewest and Flextech believe that the merged group will bring
together the business skills and operational capabilities necessary to
accelerate the development of bundled broadband services that can be
delivered to residential and business customers via a range of existing and
new distribution platforms, including the internet, wireless and ADSL. As a
result, the merged group will be well positioned to capitalise upon the
opportunities arising from the rapidly evolving broadband market and will be
able to cross-promote new branded services.
The merged group will occupy a strong position within the UK market
reflecting the quality of Telewest's network, passing approximately 4.7
million homes and over 400,000 businesses, together with Flextech's
programming and interactive content expertise. In addition, the merger will
enable the merged group to offer enhanced television services to its existing
customers and capitalise upon the immediate scope for cross-promotion between
pay-TV channels, websites and direct customer relationships.
Both Telewest and Flextech have made investments in new digital services with
significant growth potential. The merged group intends to adopt an
integrated approach towards this area, enabling its business to remain at the
forefront of market developments and to access advertising, subscription and
e-commerce revenues.
Benefits of the merger
The Boards of Telewest and Flextech believe that the commercial benefits of
the merger will include the following:
* accelerated development of new tailored service offerings to residential
and business customers
* increased momentum for online and interactive development initiatives
* cross-promotion opportunities across services and platforms
* increased bundling opportunities to maximise broadband network
distribution
* opportunity to leverage broadcasting skills and a wider range of content
relationships
* enhanced growth prospects for advertising and e-commerce revenues
The merged group will have the capability to focus the management and
operational expertise of both companies on the rapidly growing area of
interactive and transactional services, to be delivered across multiple
platforms, and bring together their complementary online businesses. The
combination of the "walled garden" service within Telewest's Active Digital
offering and Flextech's websites and transactional services will create
attractive consumer packages and commercial opportunities.
Cross-promotion between Telewest and Flextech's combined network and
television assets will accelerate the development of the merged group's
online and interactive business across multiple platforms. This will support
the development of the merged group's expanded product offering including
telephony and pay-TV services as well as leading the development of internet
sites and Telewest's "walled garden", together with investments in additional
online businesses. This will allow the merged group to access additional
sources of advertising and e-commerce revenues.
Board, management and employees
Cob Stenham will be independent non-executive chairman of the merged group.
There will be six executive directors, six non-executive shareholder
representatives (designated in equal number by Liberty Media and
MediaOne/Microsoft) and three independent non-executive directors.
The merged group will be led by Adam Singer as chief executive officer.
Reporting to him will be five other executives. Tony Illsley and Brent
Harman will be, respectively, group managing director and managing director
of content and new media. Victoria Hull will be general counsel and company
secretary, while Stephen Cook will be director, corporate strategy. Charles
Burdick will be group finance director. Following the merger, Mark Luiz will
be appointed deputy to Brent Harman.
In recognition of the changing nature of the roles of Tony Illsley and Mark
Luiz, Telewest and Flextech have agreed that if after an initial period
either of these executives does not wish to continue in his new role, he has
the option to leave the merged group.
The Boards of Telewest and Flextech believe that this management fuses the
content and distribution skills of the two companies and provides the
leadership to exploit the opportunities of the new broadband era. Further,
as Telewest and Flextech have different but complementary skills, the Boards
intend to utilise fully the staffs of both companies.
Existing employment rights, including pension rights, of employees of both
Telewest and Flextech and their respective subsidiaries will be fully
safeguarded.
Name of the merged group
It is proposed that the name of the merged group will be changed to reflect
its business activities and skill sets.
Further details of the Offer
Pre-condition and conditions
Subject to the SEC clearance set out in Appendix I, the Offer will be made on
the terms and subject to the conditions set out in Appendix I and certain
further terms to be set out in the Offer Document.
The Offer, together with various related matters, is subject to the approval
of Telewest shareholders. Telewest intends to convene an extraordinary
general meeting after the posting of the Offer Document to approve the Offer
and related matters. Details regarding the meeting and the matters to be
considered will be contained in documents to be sent to Telewest shareholders
in due course.
Commitments
Liberty Media, which holds approximately 36.6 per cent of Flextech's issued
share capital, has undertaken to accept the Offer in respect of approximately
26.4 per cent. of Flextech's issued share capital initially and, subject to
receiving the favourable tax opinion and clearance referred to below, in
respect of the balance of its holding. Save with the consent of Liberty
Media and Microsoft, this undertaking lapses on the following events:
* if the Disclosure Document has not been filed with the SEC by 29
February 2000 provided that Telewest has received all necessary co-
operation and assistance from Flextech in preparation of that document;
* if the Offer Document has not been posted by 7 March 2000 (assuming that
the SEC, using its discretion, decides not to review the Disclosure
Document);
* if the Offer Document has not been posted by 15 April 2000 (whether or
not the SEC has decided to review the Disclosure Document); and
* if the Offer is referred to the Competition Commission.
The initial acceptance in respect of the 26.4 per cent. shareholding may be
withdrawn from the Offer if (i) Liberty Media cannot obtain a tax opinion
from its US tax counsel (immediately prior to the Offer being declared
unconditional in all respects) stating, inter alia, that the share exchange
contemplated by the Offer will be treated as a reorganisation within the
meaning of section 368(a) of the Internal Revenue Code of 1986 and (ii)
Telewest has not obtained a clearance under section 138 of the Taxation of
Chargeable Gains Act 1992. If a favourable opinion and tax clearance are
obtained, Liberty Media has committed to accept the Offer in respect of its
remaining 10.2 per cent. of Flextech's issued share capital. None of Liberty
Media, Telewest and Flextech is aware of any reason currently existing why
such a tax opinion could not be rendered.
Liberty Media, MediaOne and Microsoft, who together hold approximately 51.3
per cent. of Telewest's total issued share capital, have undertaken to vote
in favour of a resolution to be put to Telewest shareholders to approve the
Offer. Because of Liberty Media's significant interest in Flextech, the
Listing Rules require any acquisition by Telewest of Liberty Media's interest
in Flextech to be approved by a separate resolution of Telewest's
shareholders (other than Liberty Media). Microsoft and MediaOne, who
together hold approximately 29.7 per cent. of Telewest's issued share
capital, have undertaken to vote in favour of such resolution.
Each of Liberty Media, MediaOne and Microsoft has undertaken to vote in
favour of any other resolutions that may be put to Telewest shareholders in
connection with the Offer - in each case to the extent permitted under
applicable law or under the rules of the City Code or the Listing Rules.
Liberty Media has additionally granted Telewest a period of exclusivity until
31 March 2000 during which it will not dispose of, or agree to dispose of,
any interest in its Flextech shares.
Recommendations
The Independent Directors (being those directors not appointed by Liberty
Media or MediaOne) of Flextech who have been so advised by CSFB, Flextech's
financial adviser, consider the terms of the Offer to be fair and reasonable
to Flextech shareholders as a whole. In providing this advice to Flextech,
CSFB has taken into account the commercial assessments of the Independent
Directors of Flextech. In addition, the Independent Directors of Flextech
believe that acceptance of the Offer is in the best interests of Flextech
shareholders.
The Independent Directors of Flextech unanimously intend to recommend
Flextech shareholders to accept the Offer as they intend to do in respect of
their own beneficial holdings.
The Independent Directors of Telewest (being those directors not appointed by
Liberty Media or MediaOne) unanimously intend to recommend Telewest
shareholders to vote in favour of the resolutions relating to the Offer at
the appropriate extraordinary general meeting as they intend to do in respect
of their own beneficial holdings.
Inter-shareholder agreements
Telewest currently has certain arrangements in place with certain of its
major shareholders relating to, inter alia, anti-dilution protections, the
right to appoint directors to the Telewest Board and rights of veto over
certain matters. Telewest has entered into certain arrangements with Liberty
Media, MediaOne and Microsoft amending these arrangements under which:
* certain anti-dilution provisions relating to further issues of Telewest
shares contained in existing arrangements between Telewest and certain
of its major shareholders are extended to Microsoft in relation to its
existing shareholding in Telewest in the event that the Offer becomes
unconditional prior to the closing of the purchase of MediaOne's
existing stake in Telewest by Microsoft ("Closing");
* certain amendments are deemed to be made to the anti-dilution provisions
contained in the proposed relationship agreement between, inter alia,
Telewest, Microsoft and Liberty Media approved by the shareholders of
Telewest at the extraordinary general meeting of Telewest held on 27
October 1999 (the "Relationship Agreement") so that, inter alia, if
Microsoft and Liberty Media were not to exercise their anti-dilution
rights to maintain their aggregate holding at 50.1% of Telewest's issued
share capital following the Offer becoming unconditional Microsoft and
Liberty Media will subsequently have certain rights to maintain the
joint aggregate percentage held by Microsoft and Liberty Media at such
lower percentage figure as they together might hold following the Offer
becoming unconditional, or, if later, as at the date of Closing;
* the number of directors appointed by Liberty Media, on the one hand, and
MediaOne/Microsoft on the other (depending on whether Closing has
occurred), is increased from two to three;
* MediaOne has agreed to sell to Microsoft any new Telewest shares it
receives for its holding of Flextech shares should any offer be made by
Telewest for Flextech provided such an offer becomes unconditional in
all respects on or before 15 July 2000. Such Telewest shares will be
acquired by Microsoft for cash at a price equivalent to #11 for each
Flextech share so exchanged for new Telewest shares. However, if such
an offer has not become unconditional in all respects by 1 March 2000,
MediaOne may terminate this agreement if it wishes to sell its Flextech
shares in the market. MediaOne has agreed not to sell, transfer, charge
or grant any rights over its Flextech shares other than pursuant to the
foregoing agreement unless such agreement is terminated or an offer by
Telewest for Flextech has not become unconditional in all respects on or
before 15 July 2000;
* Telewest has agreed not to declare the Offer unconditional as to
acceptances unless valid acceptances have been received in respect of
not less than 80 per cent. in nominal value of the Flextech shares to
which the Offer relates without the prior written consent of Liberty
Media;
* Telewest has agreed that, without the prior written consent of Microsoft
and Liberty Media, it will not (except where it is so required by the
Panel) waive any condition to the offer (save for the acceptance
condition), provided that, if the Panel does not permit Telewest not to
waive any such condition, Telewest shall at the request of Microsoft or
Liberty Media use all reasonable endeavours to persuade the Panel that
it should be so permitted;
* MediaOne, Liberty Media and Microsoft have each agreed to each other not
to acquire any shares (whether alone or together with third party
concert parties) which, taken with shares already held or acquired by it
or its concert parties, constitute 30% or more of the ordinary and
limited voting shares (taken together) of Telewest; and
* Telewest has undertaken to Liberty Media and Microsoft, that (other than
as permitted under the agreement) should an offer be made by it for
Flextech, it will not make (and will procure that none of its
subsidiary undertakings will make) any new, increased or revised offer
to acquire shares in Flextech without the prior written consent of
Liberty Media and Microsoft.
It is proposed that amendments will be made to the articles of association
and proposed articles of association of Telewest (as approved by the
shareholders of Telewest at the extraordinary general meeting of Telewest
held on 27 October 1999) and to the Relationship Agreement to reflect these
arrangements. Such amendments will require the approval of independent
shareholders of Telewest.
Capital structure
New Telewest shares
Full acceptance of the Offer assuming no exercise of options under the
Flextech share option schemes or the issue of any other Flextech shares
before the Offer closes, would (assuming the Offer becomes or is declared
wholly unconditional) result in the issue of approximately 598 million new
Telewest shares, representing approximately 26.2 per cent. of Telewest's
existing issued ordinary share capital (25.5 per cent. of Telewest's total
issued share capital, including its limited voting shares).
Assuming full acceptance of the Offer and that the Offer becomes or is
declared wholly unconditional, existing Telewest shareholders will own
approximately 80 per cent. and Flextech shareholders approximately 20 per
cent. of the merged group.
Shareholders
Assuming full acceptance of the Offer, the exercise of all outstanding
Flextech options and that the Offer becomes or is declared wholly
unconditional prior to Microsoft's acquisition of any Telewest shares held by
MediaOne (which acquisition is currently being considered by the European
Commission), Liberty Media, Microsoft and MediaOne are expected to hold
24.6%, 2.0% and 23.0% respectively of the merged group. These calculations
assume no take-up by Liberty Media, Microsoft and MediaOne of their anti-
dilution rights under the Telewest Relationship Agreement.
Telewest financing
On 25 January 2000, Telewest announced that it had completed an offering of
senior notes and senior discount notes raising gross proceeds of
approximately #544 million (an increase from the gross proceeds of #300
million originally contemplated). The net proceeds of the offering are
expected to be used to repay indebtedness of Telewest's subsidiary, Cable
London, and for general corporate purposes, including the cost of the
accelerated roll-out of Telewest's digital and high speed data services, and
the repayment of additional debt.
Information on Telewest
Telewest is a leading provider of voice, video, data and internet services to
residential and business customers in its cable franchises in the UK.
Telewest owns and operates 41 cable franchises which collectively provide
services to 33% of the homes in the UK for which a cable franchise has been
awarded. As of 30 September 1999, Telewest (including Cable London) had
passed approximately 4.7 million of the 6.1 million homes in its franchise
areas and had connected 1.6 million residential cable subscribers. Since the
1998 introduction of Millennium (Telewest's range of combined cable and
telephony services), the number of residential customers subscribing to both
cable and telephony services has continued to grow. Telewest's dual
subscriber base now numbers approximately 950,000 (including Cable London).
In addition, as of 30 September 1999, its franchises, including Cable London,
provided business telephony services to approximately 54,000 businesses and
had connected approximately 286,000 business lines.
Telewest's local hybrid fibre-coaxial (e.g. high capacity broadband) networks
are connected by a broadband national network which allows Telewest to offer
voice, video, data and internet services in its cable franchises. In 1999,
Telewest began offering digital television to selected franchise areas and
expects to offer digital services to the substantial majority of its
customers by the middle of this year. Telewest has adopted a strategy of
aggressively marketing its digital service to new and existing customers. In
the coming year, Telewest intends to enhance its digital television service
with value added interactive services, such as television-based e-commerce.
In addition, Telewest intends to introduce a high speed data service in early
2000. Telewest believes high speed data services will prove attractive to
business and residential customers by providing an affordable and efficient
alternative to traditional dial-up internet connection while providing
instant and continuous access to a variety of internet products and services
geared to the UK market.
In the year ended 31 December 1998, Telewest recorded a consolidated loss
before tax of #313.6 million (1997: #309.9 million) on revenue of #539.2
million (1997: #386.5 million). Consolidated net assets at 31 December 1998
were #858.0 million (31 December 1997: #268.2 million).
In the nine months ended 30 September 1999, Telewest recorded a consolidated
loss before tax of #356.7 million (1998: #271.6 million on a proforma basis
assuming the General Cable merger and the Birmingham Cable acquisitions had
taken place on 1 January 1998) on revenue of #576.3 million (1998: #502.2
million on the same proforma basis). Consolidated net assets at 30 September
1999 were #512.5 million (30 September 1998: #974.1 million).
Information on Flextech
Flextech's core business is the supply of entertainment content, information
and interactive services to the UK multi-channel and on-line markets.
Flextech is the largest supplier of thematic channels to the UK market. The
portfolio of channels which it represents delivered a share of approximately
25% of UK basic pay-TV viewing in 1999. These include its four wholly owned
channels, Living, Bravo, Trouble and Challenge TV. Flextech is also BBC
Worldwide's 50:50 joint venture partner in UKTV, which currently has six
channels, UK Gold, UK Gold 2, UK Style, UK Horizons, UK Arena and UK Play.
Flextech Interactive, a wholly owned division of Flextech, provides a range
of digital and interactive services and is leading the way in providing new
products to the emerging digital platforms. Its portfolio of 13 websites
currently receives over 10 million commercial page impressions a month and
includes SceneOne - The UK's Entertainment Guide - which carries a
comprehensive range of entertainment listings, reviews and shopping
facilities. SceneOne is also available via the Orange.net ISP and CWC's
interactive services; it will soon be available as a 'shop' on Open.... and
is due to launch as a channel on digital cable and satellite television.
Flextech's other media interests include shareholdings of approximately 18.5%
in Scottish Media Group and 37% in TV Travel Shop. It also owns Maidstone
Studios, a fully equipped TV production facility.
In the year ended 31 December 1998, Flextech recorded a consolidated loss
before tax of #5.1 million (1997: #6.2 million) on revenue of #126.9 million
(1997: #100.6 million). Consolidated net assets at 31 December 1998 were
#90.9 million (31 December 1997: #94.4 million).
In the six months ended 30 June 1999, Flextech recorded a consolidated loss
before tax of #2.9 million (1998: profit of #1.7 million) on revenue of #62.5
million (1998: #64.1 million). Consolidated net assets at 30 June 1999 were
#97.6 million (30 June 1998: #97.0 million).
Settlement, listing and dealing
Application will be made to the London Stock Exchange for the new Telewest
shares to be admitted to the Official List.
Further details on settlement, listing and dealing will be included in the
documents to be sent to Telewest and Flextech shareholders in due course.
Documents
Formal documentation relating to the Offer will be despatched to Flextech and
Telewest shareholders in due course. The timing of its despatch will depend
on whether the SEC decides to review the documentation but it is not expected
that any documents will be despatched before the end of February 2000.
General
The Offer will extend to any Flextech shares issued or unconditionally
allotted before the date on which the Offer closes (or such earlier date as
Telewest may, subject to the City Code, decide). Appropriate proposals will
be made in due course to participants in the Flextech share option schemes.
The Offer will lapse if the acquisition of Flextech is referred to the
Competition Commission before the later of 3.00 p.m. on the first closing
date of the Offer and the date when the Offer becomes or is declared
unconditional as to acceptances. In such circumstance, the Offer will cease
to be capable of further acceptance and persons accepting the Offer and
Telewest shall thereupon cease to be bound by acceptances delivered on or
before the date on which the Offer so lapses.
Telewest does not own or control any Flextech shares nor has it any option to
acquire any Flextech shares nor has it entered into any derivative referenced
to securities of Flextech which remains outstanding. Save for Liberty Media
and MediaOne (who hold 36.6 per cent. and 6.7 per cent. of Flextech's issued
share capital respectively), so far as Telewest is aware, no person presumed
to be acting in concert with Telewest owns or controls any Flextech shares or
has any option to acquire any Flextech shares or has entered into any
derivative referenced to securities of Flextech which remains outstanding.
The Offer will comply with the rules and regulations of the London Stock
Exchange and with the City Code.
Fractions of new Telewest shares will not be allocated or issued to accepting
Flextech shareholders. Fractional entitlements to the new Telewest shares
will be aggregated and sold in the market and the net proceeds of sales
distributed pro rata to the holders of Flextech shares entitled to them.
However, individual entitlements to amounts of less than #3.00 will not be
paid to holders of Flextech shares but will be retained for the benefit of
the enlarged Telewest group.
The Flextech shares are to be acquired by Telewest fully paid and free from
all liens, charges and encumbrances and together with all rights attaching
thereto, including the right to all dividends or other distributions
declared, made or paid after 27 January 1999.
The new Telewest shares will be issued free from all liens, charges and
encumbrances. New Telewest shares will rank pari passu in all respects with
existing Telewest shares.
The Offer will not be made directly or indirectly in, nor is the Offer
capable of acceptance from Canada, Japan or Australia.
The availability of the Offer to persons not resident in the UK or US may be
affected by the laws of the relevant jurisdiction. Persons who are not
resident in the UK or US should inform themselves about and observe any
applicable requirements. Further details in relation to overseas
shareholders will be contained in the Offer Document.
This announcement does not constitute an offer or an invitation to purchase
or sell any securities.
Appendix III contains definitions of the terms used in this announcement.
27 January 2000
The directors of Telewest and Adam Singer, Brent Harman and Stephen Cook
accept responsibility for the information contained in this press
announcement other than the information relating to the Flextech Group, the
directors of Flextech and their immediate families. To the best of the
knowledge and belief of the directors of Telewest, Adam Singer, Brent Harman
and Stephen Cook (who have taken all reasonable care to ensure that such is
the case), the information contained in this press announcement for which
they accept responsibility is in accordance with the facts and does not omit
anything likely to affect the import of such information.
The directors of Flextech accept responsibility for the information contained
in this press announcement relating to Flextech, themselves and their
immediate families. To the best of the knowledge and belief of the directors
of Flextech (who have taken all reasonable care to ensure that such is the
case), the information contained in this press announcement for which they
accept responsibility is in accordance with the facts and does not omit
anything likely to affect the import of the same.
Schroders, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for Telewest and no one else in connection with
the Offer and will not be responsible to anyone other than Telewest for
providing the protections afforded to customers of Schroders or for giving
advice in relation to the Offer.
CSFB, which is regulated in the UK by The Securities and Futures Authority
Limited, is acting for Flextech and no one else in connection with the Offer
and will not be responsible to anyone other than Flextech for providing the
protections afforded to customers of CSFB or for giving advice in relation to
the Offer.
Kleinwort Benson Securities Limited is acting as stockbroker to Telewest.
Cazenove & Co is acting as stockbroker to Flextech.
A registration statement relating to the new Telewest shares to be offered in
the Offer will be filed with the US Securities and Exchange Commission.
Investors and security holders are advised to read the prospectus regarding
the business combination transaction referenced in the foregoing information
when it becomes available, because it will contain important information.
That prospectus will be filed with the US Securities and Exchange Commission
by Telewest. Investors and security holders may obtain a free copy of the
prospectus and other documents filed by Telewest by directing such request to
Telewest Communications plc, Genesis Business Park, Albert Drive, Woking,
Surrey, GU21 5RW, United Kingdom. Attention: Company Secretary. Telephone 44
1483 750 900.
Any person who, alone or acting together with any other person(s) pursuant to
an agreement or understanding (whether formal or informal) to acquire or
control securities of Telewest or of Flextech, owns or controls, or becomes
the owner or controller, directly or indirectly of one per cent. or more of
any class of securities of Telewest or Flextech is generally required under
the provisions of Rule 8 of the City Code to notify the London Stock Exchange
and the Panel of every dealing in such securities during the offer period.
Dealings by Telewest or by Flextech or by their respective "associates"
(within the definition set out in the City Code) in any class of securities
of Telewest or Flextech during the offer period must also be disclosed.
Please consult your financial adviser immediately if you believe this rule
may be applicable to you.
This announcement contains certain statements that are, or may be deemed to
be, forward-looking statements within the meaning of the US securities laws.
These forward-looking statements relate to, among other things, anticipated
revenue growth and commercial benefits as well as the plans and objectives of
the merged group. By their nature, forward-looking statements involve risks
and uncertainties because they relate to events and depend on circumstances
that may or may not occur in the future. There are a number of important
factors that could cause actual results and developments to differ materially
from those expressed or implied by such forward-looking statements,
including, but not limited to: the ability of Telewest and Flextech to
successfully integrate their businesses and to achieve synergies expected to
arise therefrom; the extent to which consumer demand for voice, video, data
and internet services increases; the extent to which consumer preference
develops for cable television over other methods of providing in-home
entertainment; the extent to which consumers accept cable telephony as a
viable alternative to telephony services provided by British
Telecommunications plc; the extent to which consumer preference develops for
content developed and distributed by Flextech; the extent to which regulatory
and competitive pressures in the UK telephony market continue to reduce
prices; the ability of the merged group to develop and introduce attractive
interactive and high speed data services in a rapidly changing and highly
competitive business environment; the ability of the merged group to
penetrate markets and respond to changes or increases in competition; the
ability of the merged group to compete against digital television service
providers, including BSkyB and ONdigital by increasing its digital services
customer base, and the impact of an aggressive digital services marketing
campaign on its results of operations and liquidity; the merged group's
ability to respond to new or changed government regulation; the merged
group's ability to manage growth and expansion; the merged group's ability to
improve operating efficiencies, including through cost reductions; the merged
group's ability to construct and upgrade the Telewest network in a cost-
efficient and timely manner; the merged group's ability to raise additional
financing; the merged group's ability to refinance its indebtedness or the
indebtedness of any other business it may acquire; adverse changes in the
price or availability of telephony interconnection or cable television
programming; and disruptions in supply of programming, services and
equipment. All subsequent written and oral forward-looking statements
attributable to Telewest or Flextech or persons acting on their behalf are
expressly qualified in their entirety by such cautionary statements.
END
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