Liberty Media’s bid to take control of the UK’s second largest cable operator Telewest Communications has been challenged by a group of Telewest’s bondholders, who claim the move is illegal.
Liberty, which was aiming to take control of Telewest by buying up a large slice of the company’s bonds, had denied the allegation. The company also extended the expiry date of its offer from July 11 to July 19.
Liberty already controls around 48.8% of Telewest’s equity, and is aiming to gain control of the company when Telewest engages in a debt-for-equity swap to cut its huge interest burden. Such a procedure gets round the rules governing conventional take-overs.
If Liberty does take control of Telewest, it is expected that it will attempt to merge the company with NTL, the UK’s largest cable operator.