SCHEDULE 14A INFORMATION
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[The following constitutes preliminary proxy materials of Telewest
Communications plc:]
There follows the text of the announcement released on April 15, 1998:
Not for release, publication or distribution in or into Canada,
Australia or Japan
TELEWEST COMMUNICATIONS PLC ("TELEWEST")
PROPOSED RECOMMENDED MERGER WITH GENERAL CABLE PLC
("GENERAL CABLE") AND PRE-EMPTIVE ISSUE BY WAY OF OPEN OFFER TO
RAISE APPROXIMATELY (POUND)241 MILLION
HIGHLIGHTS
* On 29 March, 1998, Telewest and General Cable announced that merger
discussions between their two companies were at an advanced stage that
could lead to a recommended offer being made by Telewest for the entire
issued share capital of General Cable.
* The boards of Telewest and General Cable now announce that they have
agreed the terms of a proposed merger which will strengthen the
strategic position of the combined group as a leading cable operator in
the UK with interests in 43 franchises covering approximately 5.8
million homes.
* The combined group will be chaired by Gary Ames, Chairman of U S WEST
International Holdings, Inc.
* The merger will be achieved by way of a recommended offer by Telewest
for all General Cable shares under which:
- holders of General Cable shares will be offered 1.243 new
Telewest shares and 65 pence in cash for every General Cable
share held; and
- holders of General Cable ADSs will be offered 6.215 new
Telewest shares and 325 pence in cash for every General
Cable ADS held.
* Based on Telewest's closing share price of 88.5 pence on 14 April,
1998, being the last dealing day prior to this announcement, the Merger
Offer values each General Cable share at 175 pence, each General Cable
ADS at $14.60(1) and the whole of General Cable's issued share capital,
fully diluted for the exercise of all outstanding options, at
approximately (pound)649 million.
(1) Exchange rate of (pound)1 = $1.669
* The cash element of the Merger Offer will be financed through a
pre-emptive issue, by way of an open offer, of approximately 261
million new Telewest shares at a price of 92.5 pence per share. U S
WEST, TINTA and Cox have agreed to subscribe for their full allocation
of new Telewest shares under the Pre-emptive Issue and to subscribe for
any new Telewest shares not subscribed for by other Telewest
shareholders.
* General Utilities Holdings Limited, a subsidiary of CGE, has
irrevocably undertaken to accept the Merger Offer in respect of its
holding of 146,785,916 General Cable shares, representing approximately
40.2 per cent. of General Cable's issued share capital.
* The Merger Offer and the Pre-emptive Issue are conditional, inter
alia, on the approval of Telewest shareholders.
* U S WEST, TINTA, Cox and SBC International, Inc. have undertaken to
General Cable to vote (to the extent permitted by applicable law) in
favour of all resolutions to be proposed at the extraordinary general
meeting of Telewest to be convened in connection with the Merger Offer
and the Pre-emptive Issue.
* The posting of the Merger Offer Document is pre-conditional on:
- the completion of Telewest's financing and the obtaining of
appropriate financing consents for the purposes of making the
Merger Offer (including, if necessary, any financing or
financing consents required to implement the potential
acquisition of Birmingham Cable shares); and
- Telewest having obtained confirmation that either General
Cable's existing financing and leasing facilities will
continue to be available following completion of the Merger
Offer or that Telewest will be able to re-finance such
facilities.
A further announcement will be made as soon as practicable following
the satisfaction or waiver of these pre-conditions, or the
determination by Telewest that one or both of the pre-conditions will
not be satisfied or waived.
Commenting on the merger, Gary Ames, Chairman of Telewest, said:
"This is an excellent deal for the shareholders of both companies. The
combination of Telewest and General Cable will produce a powerful force in
broadband voice, video and data. The merger is expected to generate financial
benefits from cost savings and operating efficiencies. We believe the combined
group will be better positioned to take advantage of new product development and
growth opportunities such as digital television and internet access in a period
of accelerating technological change.
"This transaction addresses the strategic needs of both Telewest and General
Cable. It will create a stronger platform for the enhancement of shareholder
value through the delivery of superior operating performance. We believe it is
the right response to the developments taking place in our industry at this
time."
Commenting on the merger, Sir Anthony Cleaver, Chairman of General Cable, said:
"By completing this transaction, we believe Telewest and General Cable will
become firmly established as a leading force in the broadband cable and
telephone industry with a highly competitive position in the UK residential and
business telephony markets. We believe Telewest's national network and our
2
business data expertise are complementary and will enable the combined group to
exploit access-based voice and data revenue potential. We expect the combination
to strengthen the market position of both companies to an extent not possible
individually."
This highlights section should be read in conjunction with the remaining
sections of this announcement.
15 April, 1998
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PRESS ENQUIRIES
TELEWEST 01483 750900 GENERAL CABLE 0171 393 2828
Gary Ames Sir Anthony Cleaver
David Van Valkenburg David Miller
Charles Burdick
SCHRODERS 0171 658 6000 BT WOLFENSOHN 0171 982 3720
J.J. McNeil Andrew Grabowski
James Steel
DEWE ROGERSON 0171 638 9571 NATWEST SECURITIES 0171 375 5000
Anthony Carlisle Chris Airey
HILL & KNOWLTON 0171 413 3018
Paul Taffe
- -------------------------------------------------------------------------------------------------------------------
3
Not for release, publication or distribution in or into Canada,
Australia or Japan
TELEWEST COMMUNICATIONS PLC ("TELEWEST")
PROPOSED RECOMMENDED MERGER WITH GENERAL CABLE PLC
("GENERAL CABLE") AND PRE-EMPTIVE ISSUE BY WAY OF OPEN OFFER TO
RAISE APPROXIMATELY (POUND)241 MILLION
INTRODUCTION
On 29 March, 1998, Telewest and General Cable announced that merger discussions
between their two companies were at an advanced stage that could lead to a
recommended offer being made by Telewest for the entire issued share capital of
General Cable.
The boards of Telewest and General Cable now announce that they have agreed the
terms of a proposed merger which will strengthen the strategic position of the
combined group as a leading cable operator in the UK with interests in 43
franchises covering approximately 5.8 million homes.
Subject to the satisfaction of the pre-conditions referred to below, Telewest
intends to make an offer to holders of General Cable shares on the following
bases:
FOR EVERY GENERAL CABLE SHARE 1.243 NEW TELEWEST SHARES AND 65 PENCE
IN CASH
FOR EVERY GENERAL CABLE ADS 6.215 NEW TELEWEST SHARES AND 325 PENCE
IN CASH
Based on Telewest's closing share price of 88.5 pence on 14 April, 1998, being
the last dealing day prior to this announcement, the Merger Offer values General
Cable's issued share capital, fully diluted for the exercise of all outstanding
options, at approximately (pound)649 million and:
* values each General Cable share at 175 pence and each General Cable
ADS at $14.60(1);
* represents a premium of 60.6 per cent. to General Cable's share price
at the close of business on 20 February, 1998, the last business day in
London prior to the announcement by General Cable that it was in
discussions which might lead to an offer; and
* represents a premium of 64.5 per cent. to General Cable's ADS price at
the close of business on 19 February, 1998, the last day on which there
was dealing in General Cable ADSs in New York prior to the announcement
by General Cable that it was in discussions which might lead to an
offer.
General Cable ADS holders may elect to receive their entitlement to new Telewest
shares in the form of new Telewest ADSs (each new Telewest ADS representing ten
new Telewest shares).
RATIONALE FOR THE MERGER
The UK cable industry is currently undergoing significant structural change.
Recent corporate activity has highlighted the potential commercial benefits
available from consolidation, principally economies of scale together with
increased purchasing power and operational efficiency.
4
(1) Exchange rate of (pound)1 = $1.669
The boards of Telewest and General Cable believe that their businesses are
complementary and that benefits will arise from combining them. In addition, the
combined group will be better placed to benefit from the greater scale and scope
of its operations.
The combination of Telewest and General Cable will strengthen the combined
group's position as a leading provider of voice, video and data services. The
combined group is expected to have a stronger competitive position than either
of its constituent companies as a provider of packaged services for residential
and business customers within its franchises. With a national network and local
broadband access to approximately 24 per cent. of all UK households, the
combined group is expected to be a more powerful competitor in business and
residential markets.
The main benefits of the merger are expected to include:
* positioning the combined group to deliver advanced business data
services, digital television and high speed internet access using its
broadband network;
* producing incremental revenue from delivering integrated services
to residential market segments across a larger subscriber base;
* achieving cost savings and scale economies which are expected to arise
from reducing interconnect and programming costs, consolidating network
operations and maintenance, and removing duplicate overheads; and
* developing the combined group's business telephony capabilities using
General Cable's proven expertise in this area and servicing the
wholesale telephony market.
Residential customers
The combined group will exploit its position as a broadband local access
provider to offer competitive and flexible packages of telephony and cable
television services. It is also expected to benefit from increasing residential
use of broadband services, e.g. home working, education and internet access.
The combined group expects to be able to negotiate more favourable programming
arrangements which should improve the performance of its cable television
operations, facilitate the introduction of more flexible customer offerings and
reduce its reliance on dominant suppliers of programming. In addition, larger
franchise clusters will permit more cost effective use of local radio and
newspaper advertising and reducing interconnect and termination costs through
the greater usage of the combined group's network by its customers.
Business customers
The combined group aims to increase penetration of business markets with a range
of facilities-based network services including local, national and international
voice and data services and internet services.
The application of General Cable's specialised focus on business telephony is
expected to make the combined group more competitive in the market for larger
business customers and accelerate the development of the data product offering
to the combined group's customer base.
5
With the emergence of new services requiring greater bandwidth, the combined
group believes the market for wholesale telecommunications services will
continue to expand. The combined group plans to exploit the bandwidth capacity
of its national network with a view to becoming a substantial provider of
services to the wholesale market.
Advanced networks
The combined group's local distribution network consists of more than 20,000
miles of plant passing 3.9 million homes. The network architecture benefits from
a deep penetration of fibre optic cable typically down to a cluster of 500
homes. The combined group will benefit from an operational national network
which will link all of the combined group's regional locations. The combined
group's advanced network positions it well for broadband services, including
impulse pay-per-view, high speed internet and data services and digital.
The combined group will benefit from an operational national network which will
link all of the combined group's regional locations. The network is currently 80
per cent. complete and should be finished in August 1998.
The combined group's franchises
As at 31 December, 1997, on a pro forma basis, the combined group would have
included approximately 5.8 million equity homes and the combined group's network
would have passed approximately 3.9 million of these equity homes. As at 31
December, 1997, on a pro forma basis, the combined group would have had
approximately 849,000 equity cable television customers, 1,103,000 equity
residential telephone lines and 167,000 equity business telephone lines.
Reflecting the advanced state of the network build in both companies'
franchises, as at 31 December 1997, the combined group would have been
approximately 65 per cent. built out.
Telewest has previously stated that an element of its strategy is to pursue
strategic franchise acquisitions (and clusters) in the UK if attractive
opportunities become available. Following the announcement of NTL's proposed
acquisition of Comcast, Telewest has initiated the process governing the
exercise of its pre-emption rights in respect of Comcast's 27.45 per cent.
interest in Birmingham Cable. In addition, Telewest intends to initiate the
process governing the exercise of its pre-emption rights in respect of Comcast's
50 per cent. interest in Cable London if NTL's proposed acquisition of Comcast
is completed.
FURTHER DETAILS OF THE MERGER OFFER
Mix and Match Election
General Cable shareholders and ADS holders who validly accept the Merger Offer
may elect to vary the proportions in which they receive new Telewest shares and
cash in respect of their shareholdings and ADS holdings to the extent that other
General Cable shareholders make reciprocal elections. However, the total number
of new Telewest shares to be issued under the Merger Offer and the total amount
of cash to be paid out under the Merger Offer will not be varied as a result of
the Mix and Match Election. To the extent that elections cannot be satisfied in
full, they will be scaled down on a pro rata basis.
Pre-conditions and conditions
The Merger Offer will be made on the terms and subject to the pre-conditions and
the conditions set out in Appendix I, the latter of which will be included in
the Merger Offer Document.
6
The Merger Offer and the Pre-emptive Issue, together with various matters
relating thereto, are subject to the approval of Telewest shareholders. Telewest
intends to convene an extraordinary general meeting on or about the date 30
calendar days after the posting of the Merger Offer Document to consider the
matters necessary or incidental to implement and effect the Merger Offer and the
Pre-emptive Issue. Details regarding the meeting and the matters to be
considered will be contained in documents to be sent to Telewest shareholders in
due course.
Irrevocable commitments
General Utilities Holdings Limited, a subsidiary of CGE, has irrevocably
undertaken in respect of its holding of 146,785,916 General Cable shares,
representing approximately 40.2 per cent. of General Cable's issued share
capital:
* to accept the Merger Offer; and
* to vote in favour of resolutions at any meeting of General Cable's
shareholders in connection with any sale of its interest in Birmingham
Cable to Telewest.
U S WEST, TINTA, Cox and SBC have undertaken to General Cable to vote (to the
extent permitted by applicable law) in favour of all resolutions to be proposed
at the extraordinary general meeting of Telewest to be convened in connection
with the Merger Offer and the Pre-emptive Issue.
Recommendations
The directors of General Cable, who have been so advised by BT Wolfensohn, their
financial adviser, consider the terms of the Merger Offer to be fair and
reasonable. In providing advice to the directors of General Cable, BT Wolfensohn
has taken into account the General Cable directors' commercial assessments.
The directors of General Cable unanimously intend to recommend General Cable
shareholders to accept the Merger Offer as they intend to do in respect of their
own beneficial holdings.
The directors of Telewest unanimously intend to recommend Telewest shareholders
to vote in favour of the resolutions relating to the Merger Offer and the
Pre-emptive Issue at the appropriate extraordinary general meeting as they
intend to do in respect of their own beneficial holdings.
PRE-EMPTIVE ISSUE
In order to fund the cash element of the Merger Offer, Telewest proposes to make
the Pre-emptive Issue, by way of an open offer, to Qualifying Telewest
shareholders inviting them to subscribe for new Telewest shares. U S WEST, TINTA
and Cox have each undertaken to take up their full entitlement for new Telewest
shares under the Pre-emptive Issue and have also undertaken to subscribe for any
remaining new Telewest shares not taken up under the Pre-emptive Issue in
accordance with the terms of the Subscription Agreement.
It is envisaged that the Pre-emptive Issue will be made, at the time the
documentation relating to the Merger Offer is posted, on the basis of 13 new
Telewest shares for every 71 Telewest shares or Telewest Convertible Preference
shares held at the close of business on the Record Date. Approximately 261
million new Telewest shares are to be issued under the Pre-emptive Issue at a
price of 92.5 pence per share, raising a total cash amount of approximately
(pound)241 million (before expenses). Completion of the Pre-emptive Issue will
be conditional upon the approval of Telewest shareholders and the Merger Offer
having become, or been declared, unconditional in all respects.
7
Qualifying Telewest shareholders should be aware that the Pre-emptive Issue is
not a rights issue. Entitlements to new Telewest shares will not be transferable
and those not applied for under the Pre-emptive Issue will not be sold in the
market for the benefit of those who do not apply for them. The rights of
Qualifying Telewest shareholders to apply to take up new Telewest shares under
the Pre-emptive Issue will lapse if they are not exercised.
The new Telewest shares issued pursuant to the Pre-emptive Issue will rank pari
passu in all respects with the existing Telewest shares, including the right to
receive all dividends and other distributions declared, made or paid thereafter.
Further information on the Pre-emptive Issue will be announced in due course.
INTER-SHAREHOLDER AGREEMENTS
Telewest has entered into a new relationship agreement with members of the U S
WEST, TINTA, Cox and SBC groups to govern certain aspects of the relationship
between Telewest and these shareholder groups once the Merger Offer becomes or
is declared wholly unconditional. The Relationship Agreement broadly reflects
the arrangements which are already in place between Telewest, U S WEST, TINTA,
Cox and SBC under the various agreements entered into at the time of flotation
of Telewest in 1994 and its merger with SBC CableComms UK in 1995. Under the
Relationship Agreement, Telewest agrees, inter alia, that it will not undertake
any of the following without the written consent in advance of U S WEST and
TINTA:
* any material acquisition or disposal outside the ordinary course of
business;
* borrowing or granting of security in excess of (pound)50 million in
aggregate;
* any new issues of shares;
* the appointment or removal of Telewest's Chief Executive Officer; and
* an increase in the size of the board of Directors to greater than 14
members.
Telewest has also agreed that the directors it appoints shall be individuals
that are reasonably acceptable to U S WEST and TINTA. The agreement of U S WEST
and TINTA in relation to the above matters will only be required so long as that
shareholder retains a holding of 15 per cent. or more of Telewest's voting
shares.
It is also proposed that amendments will be made to the articles of association
of Telewest to reflect the revised arrangements which have been agreed between
Telewest and such shareholders. These amendments will require, and the
Relationship Agreement is conditional on, the approval of Telewest shareholders
at the extraordinary general meeting referred to above.
CAPITAL STRUCTURE
Subject to maintaining at least 25 per cent. of Telewest's issued share capital
in public hands, it is proposed that U S West, TINTA, Cox and SBC will convert
their entire respective holdings of Telewest Convertible Preference shares into
new Telewest shares. Conversion of all such shares would result in the issue of
496,066,708 new Telewest shares.
Full acceptance of the Merger Offer, completion of the Pre-emptive Issue and
Conversion, assuming no exercise of options under the General Cable share option
schemes or the issue of any other General Cable shares before the Merger Offer
8
closes, would result in the issue of approximately 1,206 million new Telewest
shares, representing approximately 130 per cent. of Telewest's existing issued
ordinary share capital.
Following the Merger Offer, Pre-emptive Issue and Conversion, and assuming the
exercise of all options under the General Cable share option schemes, existing
Telewest shareholders would hold approximately 79 per cent. and existing General
Cable shareholders approximately 21 per cent. of the then issued ordinary share
capital of the combined group.
INFORMATION ON TELEWEST
Telewest is a leading provider of cable television and residential and business
cable telephony services in the UK. It owns and operates 28 cable franchises and
has minority equity interests in three UK cable operators which own and operate
nine additional franchises. With approximately 4.4 million equity homes as at 31
December, 1997, Telewest's total represents approximately 26 per cent. of
franchise UK homes.
Telewest provides a wide variety of cable television, cable-telephony and
on-line services. Such services are provided over a hybrid fibre-coaxial (i.e.
high capacity broadband) network which has been designed to enable Telewest to
provide customers with a wide range of interactive and integrated entertainment,
telecommunications and information services as they become available. Telewest
currently provides analogue services over the network and expects to begin
introducing digital services in one franchise by the end of 1998. Such digital
services may include pay-per-view programming, near-video-on-demand, cable
television internet access, electronic mail, home shopping and banking.
In addition to the construction of a hybrid fibre-coaxial network in each of its
franchises, Telewest is developing an inter-franchise network to link the
individual networks which will carry voice, data and video traffic between the
franchises. The inter-franchise network is currently approximately 80 per cent.
built and is scheduled to be completed by August 1998.
In the year ended 31 December, 1997, Telewest recorded a consolidated loss
before tax of (pound)310.7 million (1996: (pound)250.9 million) on revenue of
(pound)386.5 million (1996: (pound)290.3 million). Consolidated net assets at 31
December, 1997 were (pound)268.2 million (31 December, 1996: (pound)579.9
million).
INFORMATION ON GENERAL CABLE
General Cable is a leading participant in the UK telecommunications industry,
providing telecommunications services to the business community and both
telephone and cable television services to the residential market. The group,
through its interests in The Cable Corporation, Yorkshire Cable and Birmingham
Cable has a presence in nine franchise areas in three of the major markets in
the UK covering approximately 1.7 million homes, representing approximately 7
per cent. of all currently franchised UK homes.
The Cable Corporation, Yorkshire Cable and Birmingham Cable build, lease and
operate integrated broadband communications networks, which are based in the
local loop. Each network is constructed using fibre optic broadband technology
which provides high transmission capacity for the delivery of voice, data, video
and entertainment services. Each franchise generates three principal sources of
revenue in business telecommunications, residential telecommunications and cable
television from one integrated network.
The acquisition of Imminus Limited on 13 March, 1997 has enabled General Cable
to expand the products offered to the business community to include managed data
network services. In addition General Cable has a national PTO (Public
9
Telecommunications Operator) licence through General Telecom, its national
business telecoms arm.
Earlier today, General Cable announced preliminary results for the year ended 31
December, 1997, which showed a consolidated loss on ordinary activities before
tax and reorganisation costs of (pound)52.3 million (1996: loss of (pound)29.8
million) on turnover of (pound)111.8 million (1996: (pound)55.7 million).
Consolidated net assets at 31 December, 1997 were (pound)202.3 million (31
December, 1996: (pound)317.5 million).
BOARD AND MANAGEMENT
The following changes to the board of Telewest are being made with immediate
effect:
* Fred Vierra, a TINTA nominated director, is stepping down as Chairman
and from the board. Gary Ames, Chairman of U S West International
Holdings, Inc. and an existing non-executive director of Telewest, has
been elected Chairman of Telewest with immediate effect;
* After five and a half years with Telewest and having recently led the
Company through a major restructuring and to the announcement of the
present Merger Offer, Stephen Davidson has decided that it is
appropriate to step down as Chief Executive Officer and from the
Telewest board. He will be replaced as Chief Executive Officer on an
interim basis by David Van Valkenburg, currently Chief Operating
Officer of Telewest, pending a search for a new Chief Executive
Officer;
* Stephen Brett, Executive Vice President, Secretary and General Counsel
of Tele-Communications, Inc. has been appointed to the board in place
of Fred Vierra as a TINTA nominated director; and
* Lord Griffiths is stepping down as a non-executive director in order to
make way for the appointment in due course of a General Cable nominee
as a non-executive director.
The board of Telewest wishes to place on record its appreciation of the
significant leadership and service shown by Fred Vierra, Stephen Davidson and
Lord Griffiths during a key period of development for Telewest.
It is intended that the board of the combined group should initially consist of
14 directors comprising seven non-executive directors (designated by U S WEST,
TINTA, Cox, SBC and CGE), four executive directors (to include an executive
member of the General Cable board) and three independent non-executive directors
(to include a nomination from the General Cable board).
EMPLOYEES
Existing employment rights, including pension rights, of employees of both
Telewest and General Cable and their respective subsidiaries will be fully
safeguarded.
OFFER PERIODS
On 23 January, 1998, U S WEST indicated that it was considering its options with
respect to Telewest, which included the possibility of increasing its stake in
the company. Telewest has been informed that U S WEST has no current intention
of making any purchase of shares in Telewest which would result in a requirement
for an offer to be made for the company.
10
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, and application will be made for the
quotation of the new Telewest ADSs on NASDAQ.
Further details on settlement, listing and dealing will be included in the
documents to be sent to Telewest and General Cable shareholders in due course.
DOCUMENTS
A circular summarising the background to and reasons for the Merger Offer,
including a notice convening an extraordinary general meeting of Telewest,
together with documentation relating to the Pre-emptive Issue and, for
information only, the Merger Offer, will be sent to Telewest shareholders once
regulatory approval for the documentation has been obtained in both the UK and
the US.
It is intended that the formal Merger Offer Document will be despatched to
General Cable shareholders once regulatory approval for the documentation has
been obtained in both the UK and the US.
It is not expected that any documents will be despatched prior to June 1998.
BIRMINGHAM CABLE
General Cable has approximately a 45.0 per cent. interest in the share capital
of Birmingham Cable. Telewest has approximately a 27.5 per cent. interest in
Birmingham Cable as does Comcast. Telewest Holdings Limited ("THL") and Comcast
are parties to an agreement (the "Co-Ownership Agreement") which regulates THL's
and Comcast's holdings of shares in Birmingham Cable. As a consequence of NTL's
proposed merger with Comcast, announced on 5 February, 1998, THL has the right
(which, subject to price and available financing, it proposes to exercise) to
acquire Comcast's holding of shares in Birmingham Cable whereupon it also has
the right to terminate the Co-Ownership Agreement. If the Co-Ownership Agreement
is not terminated prior to the Merger Offer becoming unconditional, THL would be
willing to undertake to Comcast to procure that General Cable would, once
Telewest had acquired control, offer to sell to Comcast up to fifty per cent. of
its holding in Birmingham Cable (less any shares representing the interests of
the minority shareholders in Birmingham Cable), without prejudice to THL's
rights of pre-emption under the Co-Ownership Agreement. If Comcast is unwilling
to accept THL's undertaking prior to the Merger Offer becoming unconditional
(and if no alternative acceptable to THL and Comcast can be found), then General
Cable has undertaken, subject to compliance by THL with certain specified
procedures, to offer its holding of Birmingham Cable shares, for sale pursuant
to Birmingham Cable's Articles of Association at an aggregate consideration of
(pound)100 million, such sale to be completed prior to the Merger Offer becoming
unconditional. Any such sale shall be subject to any approval required by
General Cable shareholders and General Utilities Holdings Limited has undertaken
to vote in favour of any resolution required to obtain such approval.
GENERAL
Fractions of new Telewest shares will not be allotted or issued to persons
accepting the Merger Offer but will be aggregated and sold in the market and the
net proceeds of sale will not be paid to such shareholders but will be retained
for the benefit of the combined group.
The General Cable shares which are the subject of the Merger Offer will be
acquired fully paid and free from all liens, charges, equitable interests,
encumbrances, rights of pre-emption and other third party rights or interests of
11
any nature whatsoever and together with all rights now or hereafter attached
thereto, including the right to receive and retain all dividends and other
distributions declared, made or paid hereafter.
The new Telewest shares issued pursuant to the Merger Offer will be credited as
fully paid and will rank pari passu in all respects with the existing Telewest
shares, including the right to receive all dividends and other distributions
declared, made or paid hereafter.
The Merger Offer will extend to any General Cable shares issued or
unconditionally allotted before the date on which the Merger Offer closes (or
such earlier date as Telewest may, subject to the City Code, decide).
Appropriate proposals (which will include both cash cancellation and roll-over
alternatives) will be made in due course to participants in the General Cable
share option schemes upon the Merger Offer becoming or being declared
unconditional in all respects.
The Merger Offer will lapse if the acquisition of General Cable is referred to
the Monopolies and Mergers Commission before the later of 3.00 p.m. on the first
closing date of the Merger Offer and the date when the Merger Offer becomes or
is declared unconditional as to acceptances. In such circumstance, the Merger
Offer will cease to be capable of further acceptance and persons accepting the
Merger Offer and Telewest shall thereupon cease to be bound by acceptances
delivered on or before the date on which the Merger Offer so lapses.
Neither Telewest, nor, so far as Telewest is aware, any person acting in concert
with Telewest, owns or controls any General Cable shares or has any option to
acquire any General Cable shares, other than as set out herein.
The Merger Offer will not be made, directly or indirectly in, nor is the Merger
Offer capable of acceptance from, Canada, Japan or the Commonwealth of
Australia, its territories or possessions ("Australia") or by use of the mails
of, or by any means or instrumentality of inter-state or foreign commerce of, or
any facilities of a national securities exchange of, Canada, Japan or Australia
and cannot be accepted by any such use, means or instrumentality or otherwise
from within Canada, Japan or Australia. This includes, but is not limited to,
the post, facsimile transmission, telex and telephones. Accordingly, copies of
this document and the Merger Offer documents are not being, and must not be,
mailed or otherwise distributed or sent in or into, Canada, Japan or Australia.
Persons receiving such documents, (including custodians, nominees and trustees)
must not distribute or send them in, into, or from Canada, Japan or Australia.
The availability of the Merger 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 Merger Offer Document.
If Telewest is required by the Panel to make an offer for General Cable shares
under the provisions of Rule 9 of the City Code, Telewest may make such
alterations to the conditions of the Merger Offer as are necessary to comply
with the provisions of that Rule.
This announcement does not constitute an offer or an invitation to purchase or
sell any securities.
Appendix II contains details of the financial effects of acceptance of the
Merger Offer.
Appendix III contains definitions of the terms used in this announcement.
15 April, 1998
12
- --------------------------------------------------------------------------------
The directors of Telewest and General Cable are:
Telewest General Cable
A.G. Ames Sir Anthony Cleaver
S.J. Davidson P.X. Galteau
D.R. Van Valkenburg D.J. Miller
C. J. Burdick I. Gray
A.W.P. Stenham M.J.C. Villaneau
D.J. Evans J.C. Banon
Lord Borrie C.A. Tritt
R.W. Shaner Dr G.G. Gray
J.O. Robbins W.A. Rice
S. M. Brett
The directors of Telewest accept responsibility for the information contained in
this press announcement other than the information relating to the General Cable
Group, the directors of General Cable and their immediate families. To the best
of the knowledge and belief of the directors of Telewest (who have taken all
reasonable care to ensure 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 General Cable accept responsibility for the information
contained in this press announcement relating to General Cable, themselves and
their immediate families. To the best of the knowledge and belief of the
directors of General Cable (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 Merger
Offer and the Pre-emptive Issue 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 Merger Offer or the Pre-emptive Issue.
BT Wolfensohn, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for General Cable and no one else in connection
with the Merger Offer and will not be responsible to anyone other than General
Cable for providing the protections afforded to customers of BT Wolfensohn or
for giving advice in relation to the Merger Offer.
Kleinwort Benson Securities Limited is acting as stockbroker to Telewest.
The Merger Offer will not be made, directly or indirectly, in or into Canada,
Australia or Japan.
13
Registration statements relating to the new Telewest shares and new Telewest
ADSs to be offered in the Merger Offer and the Pre-emptive Issue will be filed
with the US Securities and Exchange Commission and such securities may not be
sold nor may the Merger Offer or the Pre-emptive Issue be accepted in the United
States or by US persons prior to the time such registration statements become
effective. The Merger Offer and the Pre-emptive Issue will be made only by means
of formal offer documentation, which in the US will include a prospectus.
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 General Cable, 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 General Cable 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 General Cable or by their respective "associates"
(within the definition set out in the City Code) in any class of securities of
Telewest or General Cable 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 cost
savings, revenue growth, operating efficiencies and anticipated interests in
equity homes as well as the plans and objectives of the combined 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 successfully to integrate the General Cable business and achieve the
anticipated synergies; the extent consumer preference develops for cable
television over other methods of providing in-home entertainment and for the
combined group as a viable alternative to British Telecommunications plc and
others as a provider of telephony service; the ability of the combined group to
penetrate markets and respond to changes or increases in competition (including
the introduction of digital services by BSkyB or other operators) and adverse
changes in government regulation; the ability of the combined group to manage
growth and expansion; the ability of the combined group to improve operating
efficiencies (including through cost reductions); the ability of the combined
group to construct its network in a cost-efficient and timely manner; the
ability of the combined group to raise additional financing if there is material
adverse change in the combined group's anticipated revenues or expenses or to
finance new initiatives; the extent programming is available at reasonable
costs; adverse changes in the price of telephony interconnection; disruptions in
supply of services and equipment; the ability of Telewest to exercise its
pre-emption rights with respect to Birmingham Cable and Cable London; and the
performance of affiliated companies (which are not controlled by the combined
group). All subsequent written and oral forward-looking statements attributable
to Telewest or General Cable or persons acting on their behalf are expressly
qualified in their entirety by such cautionary statements.
14
APPENDIX I - PRE-CONDITIONS AND CONDITIONS OF THE MERGER OFFER
PRE-CONDITIONS
The posting of the Merger Offer will be pre-conditional upon:
1) the completion of Telewest's financing and the obtaining of appropriate
financing consents for the purposes of making the Merger Offer
(including, if necessary, any financing or financing consents required
to implement the potential acquisition of the Birmingham Cable shares
as described in the section entitled "Birmingham Cable"); and
2) the refinancing of existing financing and leasing facilities of the
members of the General Cable Group, or the waiver and amendment by the
providers of such facilities of their rights to withdraw and/or
accelerate such facilities in the event of an acquisition of General
Cable by Telewest, in each case on terms overall materially no less
favourable to those currently applying to such facilities, and in each
case upon such waiver and amendment becoming effective after the
satisfaction of any conditions precedent thereto.
Telewest reserves the right to waive either or both of the pre-conditions above,
in whole or in part.
CONDITIONS
The Merger Offer will be subject to the following conditions:
1) valid acceptances being received (and not, where permitted, withdrawn)
by 3.00 p.m. on the first closing date (or such later time(s) and/or
date(s) as Telewest may, subject to the rules of the City Code, decide)
in respect of not less than 90 per cent. in nominal value (or such
lesser percentage as Telewest may decide) of the General Cable shares
to which the Merger Offer relates, provided that unless agreed by the
Panel this condition will not be satisfied unless Telewest (together
with any of its wholly owned subsidiaries) shall have acquired or
agreed to acquire, whether pursuant to the Merger Offer or otherwise,
General Cable shares carrying, in aggregate, more than 50 per cent. of
the voting rights then exercisable at general meetings of General
Cable.
For the purposes of this condition:
(a) shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights they will carry
upon issue; and
15
(b) the expression "General Cable shares to which the Merger Offer
relates" shall mean (i) General Cable shares which have been
issued or allotted on or before the date the Merger Offer is
made; and (ii) General Cable shares issued or allotted after
that date but before the time at which the Merger Offer closes
(or such earlier date, not being earlier than the date on
which the Merger Offer becomes or is declared unconditional as
to acceptances or, if later, the first closing date of the
Merger Offer, as Telewest may decide) but excluding any
General Cable shares which, on the date the Merger Offer is
made, are held or (otherwise than under such a contract as
described in Section 428(5) of the Companies Act 1985 (the
"Act")) contracted to be acquired by Telewest and/or its
associates (within the meaning of Section 430E of the Act);
2) the passing at an extraordinary general meeting of Telewest and/or
General Cable (or at any adjournment thereof) of such resolutions as
may be necessary or incidental to approve, implement and effect the
Merger Offer and the Pre-emptive Issue and the acquisition by Telewest
of General Cable pursuant thereto;
3) the London Stock Exchange admitting, or (if determined by Telewest and
subject to the consent of the Panel) agreeing to admit, to the Official
List, the new Telewest shares to be issued pursuant to the Merger Offer
and the Pre-emptive Issue and such admission becoming effective in
accordance with the Listing Rules;
4) the new Telewest ADSs issuable pursuant to the Merger Offer and the
Pre-emptive Issue having been approved for quotation on the NASDAQ
National Market, subject to official notice of issuance of such new
Telewest ADSs being given to NASDAQ;
5) necessary registration statements with respect to the Merger Offer and
the Pre-emptive Issue having been declared and remaining effective
under the US Securities Act of 1933, as amended, and no stop order
suspending the effectiveness of such registration statements having
been issued and no proceeding for that purpose having been initiated or
threatened by the US Securities and Exchange Commission;
6) it being indicated in terms satisfactory to Telewest that it is not the
intention of the Secretary of State for Trade and Industry to refer the
proposed acquisition of General Cable by Telewest, or any matters
arising therefrom, to the Monopolies and Mergers Commission;
7) all necessary filings having been made and all applicable waiting
periods under the US Hart-Scott Rodino Antitrust Improvements Act of
1976 and the regulations thereunder having expired, lapsed or been
terminated as appropriate in each case in connection with the Merger
Offer and the acquisition or proposed acquisition of any shares in, or
control of, General Cable by Telewest;
8) no relevant authority having:
(a) withdrawn or refused to renew, or threatened to withdraw or to
refuse to renew, any licence or permission; or
(b) instituted, implemented or taken, or threatened to take any
other action;
the effect of which would adversely affect the businesses, assets,
prospects or profits of any member of the wider Telewest Group to an
extent which is material in the context of the Telewest Group taken as
a whole or of General Cable or any member of the wider General Cable
Group to an extent which is material in the context of the General
Cable Group taken as a whole, and no such licences or permissions
terminating or otherwise becoming invalid as a result of the Merger
16
Offer or its implementation the effect of which would adversely affect
the businesses, assets, prospects or profits of General Cable or
Telewest or any member of the wider General Cable Group or the wider
Telewest Group to an extent which is material in the context of the
General Cable Group or the Telewest Group, as the case may be, taken as
a whole;
9) no relevant authority having intervened in a way which would or might:
(a) make the Merger Offer, its implementation or the acquisition
or proposed acquisition by any member of the Telewest Group of
any shares in, or control of, General Cable by any member of
the Telewest Group, illegal, void and/or unenforceable in or
under the laws of any relevant jurisdiction, or otherwise
materially, whether directly or indirectly, restrict,
restrain, prohibit, delay, or otherwise materially interfere
with or challenge the implementation of, or impose additional
conditions or obligations with respect to, or otherwise
challenge or interfere with the Merger Offer or such
acquisition;
(b) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for any proposed
divestiture by any member of the wider Telewest Group or any
member of the wider General Cable Group of all or any portion
of their respective businesses, assets or properties or impose
any limitation on the ability of any of them to conduct any of
their respective businesses or to own any of their respective
assets or property or any part thereof in each case to an
extent which is material in the context of the Telewest Group
taken as a whole or the General Cable Group taken as a whole;
(c) impose any limitation on, or result in any material delay in,
the ability of any member of the wider Telewest Group or of
the wider General Cable Group to acquire or to hold or to
exercise effectively, directly or indirectly, any rights of
ownership in respect of shares or other securities in, or to
exercise management control over, any member of the wider
General Cable Group or the wider Telewest Group, in each case
to an extent which is material in the context of the Telewest
Group taken as a whole or the General Cable Group taken as a
whole;
(d) require any member of the wider Telewest Group or of the wider
General Cable Group to offer to acquire any shares or
securities in any member of the wider General Cable Group
(other than General Cable) or any member of the wider Telewest
Group owned by a third party, in each case to an extent which
would be material in the context of the Telewest Group or the
General Cable Group, as the case may be, taken as a whole;
(e) result in a material delay in the ability of any member of the
Telewest Group, or render any member of the Telewest Group
unable to acquire some or all of the General Cable shares;
(f) require, prevent or materially delay the divestiture by any
member of the wider Telewest Group of any shares or other
securities in General Cable;
(g) otherwise adversely affect any or all of the businesses,
assets, prospects or profits of any member of the wider
General Cable Group or the wider Telewest Group in each case
to an extent which is material in the context of the General
Cable Group or the Telewest Group, as the case may be, taken
as a whole;
17
(h) impose any limitation on the ability of any member of the
wider General Cable Group or the wider Telewest Group to
co-ordinate its business, or any part of it, with the
businesses of any other member of the wider General Cable
Group or the wider Telewest Group, as the case may be, to an
extent which is material in the context of the General Cable
Group or the Telewest Group taken as a whole, as the case may
be; or
(i) result in any member of the General Cable Group ceasing to be
able to carry on business under any name which it presently
does so,
and all applicable waiting and other time periods during which any
relevant authority could intervene in such a way having expired, lapsed
or been terminated;
10) all necessary filings having been made, all appropriate waiting periods
under any applicable legislation or regulation of any jurisdiction
having expired, lapsed or been terminated, in each case in connection
with the Merger Offer or the acquisition of any shares or other
securities in, or control of, General Cable by Telewest, and all
authorisations, waivers and determinations which Telewest reasonably
deems necessary or appropriate in any relevant jurisdiction for or in
respect of the Merger Offer or the acquisition or proposed acquisition
of any shares in, or control of, General Cable by Telewest having been
obtained in a form reasonably satisfactory to Telewest, from all
relevant authorities or (without prejudice to the generality of the
foregoing) from any persons or bodies with whom any member of the wider
General Cable Group has entered into contractual arrangements and such
authorisations, waivers and determinations together with all
authorisations, waivers and determinations necessary or appropriate for
any member of the wider General Cable Group to carry on its business
(where such business is material in the context of the General Cable
Group taken as a whole and where the absence of such authorisation,
waiver or determination would have a material adverse effect on the
General Cable Group taken as a whole) remaining in full force and
effect and all filings necessary for such purpose having been made and
there being no notice or intimation of any intention to revoke or not
to renew any of the same, and all necessary statutory or regulatory
obligations in all relevant jurisdictions having been complied with;
11) except as publicly announced (by the delivery of an announcement to the
Company Announcement Office of the London Stock Exchange) before 15
April, 1998, there being no provision of any arrangement, agreement,
licence, permit, franchise or other instrument to which any member of
the wider General Cable Group is a party, or by or to which any such
member or any of its assets is or are or may be bound, entitled or
subject or any circumstance, which, in each case as a consequence of
the Merger Offer or the acquisition or proposed acquisition by any
member of the Telewest Group of any shares in, or change in the control
or management of, General Cable, would or might reasonably be expected
to result in (to an extent which in each case is material in the
context of the General Cable Group taken as a whole):
(a) any such arrangement, agreement, licence, permit, franchise or
instrument being terminated or adversely modified or affected
or any obligation or liability arising or any adverse action
being taken or arising thereunder;
(b) the rights, liabilities, obligations or interests of any
member of the wider General Cable Group under any such
arrangement, agreement, licence or instrument or the interests
or business of any such member in or with any other firm or
company or body or person (or any arrangement or arrangements
relating to such business or interests) being terminated,
modified or adversely affected;
18
(c) any material assets or interests of any such member of the
wider General Cable Group being or falling to be disposed of
or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged
otherwise than in the ordinary course of business;
(d) any material amount of moneys borrowed by, or any other
material indebtedness, actual or contingent, of, or grant
available to, any member of the wider General Cable Group
being or becoming repayable, or capable of being declared
repayable immediately or prior to its stated repayment date,
or the ability of any such member to borrow moneys or incur
any material indebtedness being withdrawn or inhibited or
becoming capable of being withdrawn;
(e) the financial or trading position or prospects or value of any
member of the wider General Cable Group being prejudiced or
adversely affected;
(f) any member of the wider General Cable Group ceasing to be able
to carry on business under any name under which it presently
does so; or
(g) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property, assets or interests of any member of the wider
General Cable Group,
and no event having occurred which, under any provision of any
arrangement, agreement, licence, permit or other instrument to which
any member of the wider General Cable Group is a party or by which any
such member or any of its assets may be bound, entitled or be subject,
could result in any of the events or circumstances as are referred to
in sub-paragraphs (a) to (g) of this condition 11 in any case where
such result would be material in the context of the General Cable Group
taken as a whole;
12) except as publicly announced by General Cable (by the delivery of an
announcement to the Company Announcements Office of the London Stock
Exchange) prior to 15 April, 1998, no member of the General Cable Group
having, since 31 December, 1996:
(a) issued or agreed to issue, authorised or proposed the issue of
additional shares of any class, or securities convertible
into, or rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities (save as
between General Cable and wholly-owned subsidiaries of General
Cable and save for shares issued or options granted pursuant
to the General Cable share option schemes before 15 April,
1998) or redeemed, purchased or reduced any part of its share
capital or proposed the redemption, purchase or reduction of
any part of its share capital;
(b) merged with or demerged any body corporate or acquired or
(other than in the ordinary course of business) disposed of,
or transferred, mortgaged or charged or created any security
interest over, any assets or any right, title or interest in
any assets (including shares and trade investments other than
in the ordinary course of business) or made any change in its
loan or share capital, authorised or proposed or announced any
intention to propose any merger, demerger, acquisition,
disposal, transfer, mortgage, charge or security interest
(other than in the ordinary course of business) which, in any
case, is material in the context of the General Cable Group
taken as a whole;
19
(c) entered into or varied or announced its intention to enter
into or vary any contract, transaction, arrangement or
commitment (whether in respect of capital expenditure or
otherwise) otherwise than in the ordinary course of business
which is, in any case, material in the context of the General
Cable Group taken as a whole;
(d) issued, authorised or proposed the issue of any debentures or
incurred or increased any indebtedness or contingent liability
which is, in any case, material in the context of the General
Cable Group taken as a whole and not in the ordinary course of
business;
(e) recommended, declared, paid or made, or proposed the
recommendation, declaration, paying or making of, any bonus,
dividend, or other distribution whether in cash or otherwise
other than to General Cable or to a wholly-owned subsidiary of
General Cable;
(f) been unable, or admitted in writing that it is unable, to pay
its debts or having stopped or suspended (or threatened to
stop or suspend) payment of its debts generally or ceased or
threatened to cease carrying on all or a substantial part of
its business;
(g) waived or compromised any claim which is material in the
context of the relevant member of the wider General Cable
Group;
(h) proposed any voluntary winding up;
(i) entered into or varied or made any offer (which remains open
for acceptance) to enter into or materially vary the terms of
any service agreements with any of the directors of any member
of the General Cable Group;
(j) entered into any contract, reconstruction, amalgamation,
commitment or other transaction or arrangement which would be
materially restrictive on the business of any member of the
General Cable Group or the Telewest Group;
(k) made any alteration to its memorandum or articles of
association or other incorporation documents; or
(l) entered into any contract, commitment, agreement or
arrangement or passed any resolution or made any offer (which
remains open for acceptance) with respect to or announced an
intention to effect or to propose any of the transactions,
matters or events referred to in this condition 12;
13) since 31 December, 1996 and except as announced publicly by General
Cable (by the delivery of an announcement to the Company Announcements
Office of the London Stock Exchange):
(a) there having been no receiver, administrative receiver or
other encumbrancer appointed over any material portion of the
assets of any member of the wider General Cable Group or any
analogous proceedings or steps having taken place under the
laws of any relevant jurisdiction and there having been no
petition presented for the administration of any member of the
wider General Cable Group or any equivalent proceedings or
steps taken under the laws of any other jurisdictions;
20
(b) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits of
prospects of any member of the wider General Cable Group which
is material in the context of the General Cable Group taken as
a whole;
(c) save for matters fully and fairly disclosed to Telewest before
15 April, 1998, no litigation or arbitration proceedings,
prosecution or other legal proceedings having been instituted,
announced or threatened by or against or remaining outstanding
against any member of the wider General Cable Group which is
material in the context of the General Cable Group taken as a
whole;
(d) no contingent or other liability having arisen or become
apparent or increased which would or might be likely adversely
to affect any member of the wider General Cable Group which is
material in the context of the General Cable Group taken as a
whole; and
(e) no investigation by any relevant authority having been
threatened, announced, implemented or instituted or remaining
outstanding in respect of any member of the wider General
Cable Group which, in any such case, is material in the
context of the General Cable Group taken as a whole;
14) Telewest not having discovered:
(a) that any financial, business or other information concerning
the wider General Cable Group disclosed at any time by or on
behalf of any member of the wider General Cable Group either
is misleading or contains a misrepresentation of fact which is
material in the context of the Merger Offer or omits to state
a fact necessary to make any information contained therein not
misleading to an extent which is so material; or
(b) that any member of the General Cable Group is subject to any
liability (contingent or otherwise) which is not disclosed in
the annual report and accounts of General Cable for the year
ended 31 December, 1996 or the interim report for the six
months ended 30 June, 1997 and which is material in the
context of the General Cable Group taken as a whole;
(c) that any past or present member of the wider General Cable
Group has not complied with all applicable laws of any
relevant jurisdiction relating to environmental matters which
non-compliance would be likely to give rise to a material
liability (whether actual or contingent) or cost on the part
of any member of the wider General Cable Group which is, or
would be, material in the context of the General Cable Group
taken as a whole;
(d) that there has been an emission, disposal, discharge, deposit,
spillage or leak of waste or hazardous or harmful substances
on or about or from any property now or previously owned, or
occupied or made use of by any past or present member of the
wider General Cable Group which would be likely to give rise
to any liability (whether actual or contingent) or cost on the
part of any member of the wider General Cable Group which is,
or would be, material in the context of the General Cable
Group taken as a whole;
(e) that there is or is likely to be any material liability
(whether actual or contingent) or requirement to make good,
repair, re-instate or clean-up any property now or previously
owned, occupied or made use of by any past or present member
of the wider General Cable Group; and
21
(f) any information which affects the import of any information
disclosed at any time by or on behalf of any member of the
wider General Cable Group which is material in the context of
the Merger Offer.
For the purposes of these conditions: (a) "relevant authority" means any central
bank, government, government department or governmental, quasi-governmental,
supranational, statutory or regulatory body, court, trade agency, association,
institution or professional or environmental association in any relevant
jurisdiction; (b) a relevant authority shall be regarded as having "intervened"
if it has instituted, implemented, threatened or decided to taken any action,
proceedings, suit, investigation or enquiry, or made, enacted or proposed any
statute, regulation, decision or order, or taken any measures or other steps and
"intervene" shall be construed accordingly; (c) "authorisations" means
authorisations, orders, grants, recognitions, confirmations, consents, licences,
clearances, permissions and approvals; (d) "Telewest Group" means Telewest and
its subsidiary undertakings and the "wider Telewest Group" means Telewest and
its subsidiary undertakings, associated undertakings and any other undertaking
in which Telewest and such undertakings (aggregating their interests) have a
substantial interest; (e) "General Cable Group" means General Cable and its
subsidiary undertakings and "wider General Cable Group" means General Cable and
its subsidiary undertakings, associated undertakings and any other undertaking
in which General Cable and such undertakings (aggregating their interests) have
a substantial interest and for these purposes, "subsidiary undertaking",
"associated undertaking" and "undertaking" have the meanings given by the Act
and "substantial interest" means a direct or indirect interest in 20 per cent.
or more of the voting equity capital of an undertaking.
Telewest reserves the right to waive all or any of conditions 6 to 14
(inclusive) above, in whole or in part.
Conditions 6 to 14 (inclusive), if not waived, must be fulfilled or satisfied on
or before midnight on the day which is the later of (a) 21 days after the first
closing date of the Merger Offer and (b) 21 days after the date on which
condition 1 is fulfilled (or in each case such later date as the Panel may
agree) failing which the Merger Offer will lapse. Telewest shall be under no
obligation to waive or treat as satisfied any of conditions 6 to 14 (inclusive)
by a date earlier than the latest date specified above for the satisfaction
thereof notwithstanding that the other conditions of the Merger Offer may at
such earlier date have been waived or fulfilled or satisfied and that there are
at such earlier date no circumstances indicating that any of such conditions may
not be capable of fulfilment or satisfaction.
22
APPENDIX II - FINANCIAL EFFECTS OF ACCEPTANCE
The following table sets out, for illustrative purposes only and on the bases
and assumptions set out below, the financial effects of the Merger Offer on
capital value for a General Cable shareholder and ADS holder accepting the terms
of the Merger Offer if the Merger Offer becomes or is declared unconditional in
all respects:
NOTES PENCE
INCREASE IN CAPITAL VALUE
Value of Merger Offer per General Cable share
new Telewest shares (i) 110
cash 65
-----------
total value 175
Market value of one General Cable share on 20 February, 1998 (ii) 109
------------
Increase in capital value 66
===========
This represents an increase of 60.6%
NOTES $ (v)
INCREASE IN CAPITAL VALUE
Value of Merger Offer per General Cable ADS
new Telewest shares (i) 9.18
cash 5.42
-----------
total value 14.60
Market value of one General Cable ADS on 19 February, 1998 (iii) 8.875
------------
Increase in capital value 5.725
===========
This represents an increase of 64.5%
Notes:
(i) Based on the middle market quotation of a Telewest share of 88.5
pence as derived from the Official List on 14 April, 1998, the last
dealing date prior to this announcement.
(ii) Based on the middle market quotation of a General Cable share of 109
pence as derived from Official List on 20 February, 1998, the last
business day in London prior to the announcement by General Cable
that it was in discussions which might lead to an offer.
(iii) Based on the closing price of a General Cable ADS of $87/8 on NASDAQ
on 19 February, 1998, the last day on which there was dealing in
General Cable ADSs in New York prior to the announcement by General
Cable that it was in discussions which might lead to an offer.
(iv) No account has been taken of any liability to taxation or the treatment of
fractions.
(v) Exchange rate of (pound)1 = $1.669
23
APPENDIX III - DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
"Admission" the admission of the new Telewest shares to
the Official List becoming effective in
accordance with the Listing Rules
"Birmingham Cable" Birmingham Cable Corporation Limited
"BT Wolfensohn" BT Wolfensohn, a division of Bankers Trust
International PLC
"Cable London" Cable London plc
"CGE" Compagnie Generale des Eaux S.A.
"City Code" The City Code on Takeovers and Mergers
"closing share price" the middle market quotation as derived from
the Official List
"Comcast" Comcast UK Cable Partners Limited
"combined group" Telewest and its subsidiary undertakings and
associated companies as enlarged by the
merger with General Cable
24
"Conversion" the proposed conversion by U S West, TINTA,
Cox and SBC of their entire respective
holdings of Telewest Convertible Preference
shares into new Telewest shares upon the
Merger Offer being declared wholly
unconditional
"Cox" Cox Communications, Inc.
"General Cable" General Cable PLC
"General Cable ADS holders" holders of General Cable ADSs
"General Cable ADSs" American Depositary Shares of General Cable,
each representing five General Cable shares
"General Cable Group" General Cable and its subsidiary
undertakings
"General Cable shareholders" holders of General Cable shares
"General Cable share option
schemes" the General Cable Group Approved Share
Option Scheme, Unapproved Share Option
Scheme and 1996 Unapproved Share Option
Scheme
"General Cable shares" the existing issued and fully paid ordinary
shares of (pound)1 each in the capital of
General Cable and any further such shares
which are unconditionally allotted or issued
on or before the date on which the Merger
Offer becomes or is declared unconditional
as to acceptances (or such later date as
Telewest may decide) including any such
shares which are evidenced by ADSs
"General Telecom" an operating division of the General Cable
Group
"Listing Rules" the rules and regulations made by the
London Stock Exchange under the Financial
Services Act 1986, and contained in the
London Stock Exchange's publication of the
same name
"London Stock Exchange" London Stock Exchange Limited
"Merger Offer" the merger offer to be made by Schroders on
behalf of Telewest to acquire all of the
issued and to be issued General Cable shares
on the terms and subject to the conditions
to be set out in the Merger Offer Document
(including, where the context permits, any
subsequent revision, variation, extension or
renewal thereof)
"Merger Offer Document" the formal offer documentation to be posted
by Telewest to General Cable shareholders
relating to the Merger Offer
"Mix and Match Election" an election available to accepting General
Cable shareholders to vary the proportion of
new Telewest shares and cash receivable
under the Merger Offer to the extent that
other General Cable shareholders make
reciprocal elections
25
"NASDAQ" NASDAQ National Market
"NatWest Securities" NatWest Securities Limited
"new Telewest ADSs" American Depositary Shares of Telewest, each
representing ten new Telewest shares
"new Telewest shares" new ordinary shares of 10 pence each in the
capital of Telewest to be issued pursuant to
the Merger Offer, the Pre-emptive Issue and
Conversion
"NTL" NTL Incorporated
"Official List" The Daily Official List of the London Stock
Exchange
"Panel" The Panel on Takeover and Mergers
"Pre-emptive Issue" the issue, by way of open offer, of
approximately 261 million new Telewest
shares to Qualifying Telewest shareholders
"Qualifying Telewest shareholders" Telewest shareholders and the Telewest
Convertible Preference shareholders whose
names appear on the Telewest share register
on the Record Date (except for certain
non-US overseas shareholders)
"Record Date" the record date for the Pre-emptive Issue,
which is expected to be announced in due
course
"Relationship Agreement" the agreement dated 15 April 1998 made
between U S WEST International Holdings,
Inc., U S WEST UK Cable, Inc., U S WEST
Cable Partnership Holdings, Inc.,
Tele-Communications International, Inc.,
United Artists Programming - Europe, Inc.,
Cox, Cox U.K. Communications, LP, SBC
International, Inc., Southwestern Bell
International Holdings (UK-1) Corporation
and Telewest
"SBC" SBC Communications, Inc.
"Schroders" J. Henry Schroder & Co. Limited
"Subscription Agreement" an agreement dated 15 April, 1998 between
Telewest, U S WEST, TINTA and Cox pursuant
to which U S WEST, TINTA and Cox have
undertaken to take up their full entitlement
for new Telewest shares under the
Pre-emptive Issue and have also undertaken
to subscribe for any remaining new Telewest
shares not taken up under the Pre-emptive
Issue
26
"Telewest" or "Company" Telewest Communications plc
"Telewest ADS holders" holders of Telewest ADSs
"Telewest ADSs" American Depositary Shares of Telewest, each
representing ten Telewest shares
"Telewest Convertible Preference
shareholders" the holders of Telewest Convertible
Preference shares
"Telewest Convertible Preference
shares" convertible preference shares in the capital
of Telewest which are owned by U S West,
TINTA, Cox and SBC and which are convertible
into Telewest shares on the basis of one
Telewest share for every convertible
preference share
"Telewest Group" Telewest and its subsidiary undertakings
"Telewest shareholders" the holders of Telewest shares
"Telewest shares" ordinary shares of 10 pence each in the
capital of Telewest
"The Cable Corporation" The Cable Corporation Limited
"THL" Telewest Holdings Limited, a subsidiary of
Telewest
"TINTA" Tele-Communications International, Inc.
"United Kingdom" or "UK" the United Kingdom of Great Britain and
Northern Ireland
"US" or "United States" the United States America, its territories
and possessions, any state of the United
States and the District of Columbia
"U S WEST" U S WEST, Inc.
"Yorkshire Cable" The Yorkshire Cable Group Limited
For the purposes of this announcement, "subsidiary", "subsidiary undertaking"
and "associated undertaking" have the respective meanings given by the Companies
Act 1985.
27
INCORPORATION BY REFERENCE
Telewest hereby incorporates by reference its Annual Report on Form
10-K for the fiscal year ended December 31, 1997 which has been filed with the
Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange Act").
All documents filed by Telewest pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Proxy Statement and
prior to the date of the extraordinary general meeting of Telewest to which this
proxy statement relates shall be deemed to be incorporated by reference in this
Proxy Statement and to be a part hereof from the date of filing such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement to the extent that a statement
contained herein, or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement .
Additional copies of the information incorporated by reference herein
may be obtained without charge from the Company Secretary at Genesis Business
Park, Albert Drive, Woking, Surrey GU21 5RW, United Kingdom, telephone (44)
1483-750-900.
[End of preliminary proxy materials.]