Liberty blocked in bid for controlling stake in Telewest

Liberty Media, billionaire John Malone's acquisitions vehicle, have been blocked by a majority of shareholders in their bid to gain a further 20% of the UK's second largest cable company Telewest.
Liberty had been offering premiums to entice creditors to part with bonds to the value of $350 million – about 20% of the $4.2 billion total bond capacity – in order to secure its influence, which could otherwise be diluted by a disparate array of bondholders.
However, as with its involvement at ntl, Liberty have been frustrated in a move that would enable them to dictate restructuring procedures for the heavily indebted Telewest. The shareholders (who are not thought to be organised into a single unit) rejected the Liberty bid, stating that they were "sceptical" the Malone offer would be "in the best interests of bondholders as a whole".
However, Liberty could yet gain control of the company through the back the door, as the Liberty are reportedly in talks with Microsoft to buy out their 23.6% share interest.
Telewest's financial problems deepened this week following chairman Cob Stenham's admission that he misled shareholders at last week's AGM when he claimed that senior executives had adopted a pay freeze to assuage debt fears. It was subsequently revealed that Finance Director Charles Burdick accepted a £40,000 pay rise, hiking his pay up to £400,000 a year.
However, a Telewest spokesperson has said that the pay award was negotiated previous to the institution of the pay freeze, and Mr Stenham told the Sunday Times that it had simply been "a mistake" and he did not knowingly feed shareholders misleading information.
For their part, shareholders had already voiced their anger at the prospect of senior management netting bonuses of £690,000 at a time when Telewest's debts had spiralled to over £5.3 billion. Especially so, as many investors who backed the company over the past two years have seen the value of their investment slide by over 90%.
On Monday, Telewest shares fell 58p to 318p.
Telewest, www.telewest.co.uk
(GMcG)