Telewest put SMG stake up for sale

Indebted UK number two cableco Telewest has put its 17 per cent, stake in Scottish Media Group (SMG) up for sale. Telewest Managing Director Charles Burdick has described the activity as no longer core to the company's business, and the proposed sale would help reduce Telewest's €5.6 billion debt said Burdick.
Schroder Salomon Smith Barney has been hired to manage the sale of the holding, valued at some €81 million based on its share price. However some analysts suggest that the company's TV franchises could be worth up to €470 million.
Shareholders approval has been sought for the proposed sale, which will be discussed at an extraordinary general meeting on 4 September. Telewest would then have the option of disposing of the stake within 12 months if it were agreed.
ITV companies Carlton and Granada are seen as potential bidders, both having said they would like to own the SMG-held TV regions of Scottish and Grampian - though as the two look at their own consolidation, it is not clear if they would bid against each other to strengthen their own position prior to a merger of the two. Granada has long owned a 16.9 per cent stake in SMG and buying another stake this size would force it, under takeover rules, to make an outright bid for the whole of SMG.
Finance groups have eyed the organisation for break up of its various media activities, with Capital Radio, among others, reported interested in SMG's Virgin Radio. The company has debt of about €636 million. Changes to UK media law would also allow a European bidder by next year.
(GB)