All bids are in for NTL sale


30 Mar 2005

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UPDATE: All of the remaining bidding consortia hoping to acquire the Irish cable operation of NTL were submitted by their 1pm deadline today, but the decision process “could take some time”, a spokesperson for the company told siliconrepublic.com.

On a final analysis, various experts say that the final price for the Irish operation of the cable giant is unlikely to reach €300m.

In the end only three bidding consortia remained in the race. The first bidder consists of a consortium of finance and media players, including US merchant bank Veronis Suhler Stevenson, Irish sports broadcaster Setanta, Davy Private Clients and Merrion Capital. It emerged this morning that one of the consortium’s members IAWS at the last minute dropped out the race.

A second bidder was UGC Europe, which acquired Irish cable operator Chorus for €55m last year. It is understood that UGC is currently on an acquisition drive in Europe and has a war chest of US$1bn with which to acquire cable and telecoms companies. However, it has been argued that if UGC emerges successful in its bid it could run into competition issues with the Competition Authority that could end up drawing out the sales process by up to six months.

The third bidder is a consortium comprising Kerry cable veteran John Riordan and venture capital firm Doughty Hanson. In the innuendo and spin surrounding the bidding war over the past couple of weeks this last bidder miraculously managed to keep out of the papers.

Up until the deadline sources have suggested that the process could have witnessed the advent of a fourth possible bidder but there is no evidence to suggest this occurred.

While reports suggest that the mysterious fourth bidder might be Denis O’Brien and the Carlisle Group, informed sources speaking with siliconrepublic.com have discounted this suggestion arguing that it is more likely O’Brien might join one of the three existing consortia. One possibility is that O’Brien may plug the gap left by the withdrawal of IAWS from the Setanta/VSS consortium, which could have resulted in the loss of a possible €50m contribution to their bid.

In conversation with siliconrepublic.com, a spokesperson for NTL confirmed the bids were in and the decision process “could take some time”.

How much time exactly is needed is unclear, but informed sources suggest that a decision could be made as soon as within a day or two. Another source suggested that a likely scenario would involve NTL selecting one company as a favourite and possibly a second as a backup or understudy in the event of due diligence on the first transaction not working out.

Ultimately the decision rests with NTL, which is being advised in the process by Goldman Sachs. In recent weeks, NTL’s Irish division reported a 3.2pc increase in fourth-quarter revenues on the year to £19.3m sterling. At the time, NTL CEO Simon Duffy said: “We are evaluating strategic alternatives for our business in the Republic of Ireland, which may include a divestiture,” indicating the company can also decide not to sell its operation.

What is clear however is that despite the spin doctoring and leakages of recent weeks surrounding the various bidding consortia, NTL itself has succeeded in ensuring a veil of secrecy over proceedings, possibly striving to avoid the bidding chaos that resulted in a High Court case in 1999, following the sale of the RTÉ and Eircom-owned Cablelink to NTL for €680m.

By John Kennedy