LONDON — U.S. billionaire John Malone came closer Thursday to gaining control of Telewest Communications, the No. 2 British cable television company.
Microsoft Corp. offered Malone its 23.6% stake, which would give him about half the shares. Tele- west also plans talks to cut its $8.1-billion debt. Malone's Liberty Media Corp. owns enough bonds to force Telewest to swap most of its debt for equity, investors said.
"Liberty's probably got 25% of the bonds, meaning it can block any restructuring that doesn't suit it," said Louis Gargour, a hedge fund manager at RAB Capital, which owns Telewest bonds. "That puts it in control."
Malone is seeking to take control of Telewest and eventually merge it with larger cable company NTL Inc., which is in Chapter 11 protection from creditors after amassing $17.5 billion in debt, investors said. That would allow him to compete with Rupert Murdoch's British Sky Broadcasting Group, the biggest British pay-TV provider, and BT Group, the former phone monopoly.
A combined NTL and Telewest would supply TV services to about 3.5 million British customers, compared with BSkyB's 5.9 million satellite subscribers. It also would have 4.1 million phone customers and 352,000 high-speed Internet users. The unprofitable companies operate in franchises that do not overlap.