SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 18, 1999
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NTL INCORPORATED
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-25691 13-4051921
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
110 East 59th Street, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 906-8440
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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(A) On July 18 1999, NTL Incorporated ("NTL") announced that it had
acquired certain broadband cable franchises from British Telecommunications plc
("BT"). The franchises are located in Westminster and Milton Keynes and cover a
total of approximately 210,000 homes, approximately 189,000 of which are passed
by broadband networks. The acquisitions increase NTL's total franchise homes in
the UK and Ireland to more than 5.8 million homes.
NTL expects to invest approximately 15 million pounds sterling to upgrade
the networks for digital cable, interactive services and high speed Internet
access. In addition, NTL will pay BT 5 million pounds sterling on closing and up
to 14 million pounds sterling on completion of the upgrade of the Westminster
network. Thereafter, NTL will lease the networks from BT on a long term basis
for an annual lease payment of approximately 3.9 million pounds sterling.
(B) On July 26, 1999, NTL, with the support of France Telecom, agreed to
acquire the consumer cable telephone, internet and television operations of CWC
ConsumerCo. NTL proposes to acquire CWC ConsumerCo for 54.4 million new shares
of NTL common stock and 2.85 billion pounds sterling in cash representing
approximately 6.3 billion pounds sterling in total equity consideration. NTL
will also assume approximately 1.9 billion pounds sterling of CWC's net debt,
plus operational adjustments prior to closing.
NTL and France Telecom also announced on July 26, 1999, that France Telecom
has agreed to invest a total of $5.5 billion in NTL, which includes an initial
investment of $1 billion previously announced on July 15, 1999. Under the terms
of the France Telecom investment, France Telecom will invest $2.75 billion in
NTL common equity issued at $92.50 per share and $2.75 billion of convertible
preferred stock with 5% dividend and a conversion price of $125 per share. The
France Telecom investment will finance the cash portion of the consideration for
NTL's acquisition of CWC ConsumerCo and strengthen NTL's balance sheet. Through
this investment, France Telecom will become NTL's largest shareholder with up to
25% of the company's fully diluted share capital.
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Item 7. Financial Statements and Exhibits
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Exhibits
99.1 Press release, issued July 18, 1999
99.2 Press release, issued July 26, 1999
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NTL INCORPORATED
(Registrant)
By: /s/ Richard J. Lubasch
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Name: Richard J. Lubasch
Title: Executive Vice President-
General Counsel
Dated: July 26, 1999
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EXHIBIT INDEX
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Exhibit Page
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99.1 Press release, issued July 18, 1999
99.2 Press release, issued July 26, 1999
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NTL ACQUIRES KEY STRATEGIC BT CABLE FRANCHISES
TOTAL FRANCHISE GROWS TO 5.8 MILLION HOMES
New York, New York (July 18 1999)--NTL Incorporated (NASDAQ: NTLI; EASDAQ:
NTLI.ED) NTL announced that it has acquired certain broadband cable franchises
from British Telecommunications plc ("BT"). The franchises are located in
Westminster and Milton Keynes and cover a total of approximately 210,000 homes,
approximately 189,000 of which are passed by broadband networks. The
acquisitions increase NTL's total franchise homes in the UK and Ireland to more
than 5.8 million homes.
NTL expects to invest approximately 15 million pounds sterling to upgrade the
networks for digital cable, interactive services and high speed Internet access.
In addition, NTL will pay BT 5 million pounds sterling on closing and up to 14
million pounds sterling on completion of the upgrade of the Westminster network.
Thereafter, NTL will lease the networks from BT on a long term basis for an
annual lease payment of approximately 3.9 million pounds sterling.
Westminster is one of the UK's most prestigious cable franchises, and gives NTL
a strategically important presence in the heart of London. The franchise covers
approximately 137,000 homes and enables NTL to reach the offices and homes of
key people within the UK government and leading businesses. This network will be
connected to NTL's fiber facilities in London. Milton Keynes fills an important
geographic area within NTL's existing cluster of franchises, connecting in the
north to its Northampton franchise, in the east to its Bedfordshire franchise
and in the south to its Oxford franchise. This franchise covers approximately
74,000 homes, and has achieved 81% customer penetration. In addition to these
franchises, NTL will acquire an additional 24,000 homes which are served by
narrowband cable systems.
###
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18th July
NTL Announces Acquisition of BT Cable Franchises
page 2/2
For further information contact: John F. Gregg, Chief Financial Officer; Richard
J. Lubasch, Executive Vice President-General Counsel; or Kathy Makrakis,
Director - Investor Relations: (212)-906-8457, e-mail:
[email protected].
In the United Kingdom contact: Alison Smith, Head of Group Communications:
011-44-1252-402662, e-mail: [email protected]
More on NTL:
No other company matches NTL's capability to use world-leading technology
to deliver telephone, tv, internet and interactive services to UK homes and
businesses.
22 million homes watch ITV, C4 and C5 thanks to NTL's transmission network:
5.6 million of those homes are within its "speed of light" fiber-optic
broadband network.
NTL pioneered digital tv and is involved in digital terrestrial, cable and
satellite and launched the UK's first interactive service in March 1999.
NTL's national network carries such names as Virgin, Orange and AT&T. With
businesses in France, Australia and Ireland, NTL's headquarters is in Hook,
Hampshire, UK. It has over 10,000 associates and is listed on NASDAQ.
To get the bigger picture, or find out more about one of our business
areas, visit our website at www.ntl.com. The press office page invites you
to register for a press pass to receive up to the minute information and
images.
EXHIBIT 99.2
NTL, BACKED BY FRANCE TELECOM, TO ACQUIRE CONSUMER OPERATIONS
OF CABLE & WIRELESS COMMUNICATIONS PLC
NTL TO BECOME THE UK'S NO 1 BROADBAND COMMUNICATIONS COMPANY
FRANCE TELECOM TO BECOME NTL'S LARGEST SHAREHOLDER
NEW YORK, NEW YORK (July 26, 1999) -NTL Incorporated ("NTL") (Nasdaq: NTLI;
Easdaq: NTLI.ED), with the support of France Telecom, has agreed today to
acquire the consumer cable telephone, internet and television operations of
Cable & Wireless Communications plc ("CWC ConsumerCo"). NTL proposes to acquire
CWC ConsumerCo for 54.4 million new shares of NTL common stock and 2.85 billion
pounds sterling in cash representing approximately 6.3 billion pounds sterling
in total equity consideration. NTL will also assume approximately 1.9 billion
pounds sterling of CWC's net debt, plus operational adjustments prior to
closing. The bringing together of NTL and CWC ConsumerCo will create the largest
cable telephone and TV company in the UK and Ireland with more than 2.8 million
customers.
NTL and France Telecom also announced today that France Telecom has agreed to
invest a total of $5.5 billion in NTL, which includes an initial investment of
$1 billion previously announced on 15 July 1999. Under the terms of the France
Telecom investment, France Telecom will invest $2.75 billion in NTL common
equity issued at $92.50 per share and $2.75 billion of convertible preferred
stock with 5% dividend and a conversion price of $125 per share. The France
Telecom investment will finance the cash portion of the consideration for NTL's
acquisition of CWC ConsumerCo and strengthen NTL's balance sheet.
Through this investment, France Telecom will become NTL's largest shareholder
with up to 25% of the company's fully diluted share capital. France Telecom will
thus participate in the consolidation of the UK cable industry and help create
the country's largest broadband alternative local loop telecom company. France
Telecom will support NTL in the development of innovative services combining
telephony, digital television and the internet.
Michel Bon, Chairman and Chief Executive of France Telecom, said:
"Our investment in NTL is consistent with France Telecom's international
strategy, within which Europe is the main priority. It is a unique
opportunity for France Telecom to participate in the development of
innovative and convergent services combining telephony, digital TV and the
internet with one of the largest alternative telecom companies in the UK.
We have been particularly impressed with NTL's management and their ability
to provide superior services to UK customers."
Barclay Knapp, President and CEO, NTL said:
"The acquisition of CWC residential assets, and the strategic partnership
forged with France Telecom, vaults NTL to centre stage in this new world of
communications, where broadband fibre optic networks are making truly
revolutionary new services possible. We not only increase our scope as a
major force in media and telecommunications in the UK, but also gain the
opportunity to
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become a web-centered worldwide showcase for innovative telephone, TV,
internet and interactive services.
"I am sure that our increased national coverage will make NTL more
effective in competing against BSkyB and British Telecommunications and in
developing new interactive TV and high speed internet services. NTL will
aim to improve the operating efficiencies of CWC's consumer business (in
terms of penetration and churn rate) and deliver superior value for our
shareholders. We are very excited to be working with France Telecom and
look forward to leveraging their expertise and experience. "
New NTL
The combined operations of NTL and CWC ConsumerCo will bring a new scale and
focus to the development of cable networks in the UK. With this transaction:
NTL will become the largest cable telephony and TV company in the UK
NTL will have more than 2.8 million customers and 4.3 million revenue
generating units
NTL's cable networks will pass approximately 12 million franchise homes in
the UK and Ireland
NTL's networks will pass over one half of the UK's total cable homes
including homes in Manchester, Leeds, Glasgow, Cardiff, Belfast, and most
of metropolitan London.
NTL intends to achieve several operational and strategic benefits from the
transaction. On a standalone basis, prior to giving effect to recent
acquisitions, NTL has achieved industry leading customer penetration and
retention levels with CATV penetration of approximately 44% compared with the UK
industry average of approximately 24% and residential telephony penetration of
approximately 43% compared with the UK industry average of approximately 29%.
Similarly, it had CATV churn of approximately 12% compared with the UK industry
average of approximately 27% and residential telephony churn of approximately
12% compared with the UK industry average of approximately 22%.
NTL believes this success has been largely due to its focus on customer service
and the development of product offerings that emphasise choice, value and
simplicity. NTL plans to apply its marketing and customer service skills to
enhance the operating performance of the combined entity. NTL also expects to
achieve significant operating synergies from the combined operations including
economies of scale in content and equipment purchasing, reduced telephony
interconnect and call termination costs and improved operating leverage. As
previously indicated, NTL is also considering applying for a UMTS licence.
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The combined NTL and CWC ConsumerCo will have the following operational
statistics:
NTL INCLUDING
(AS OF 31 MARCH 99, NTL RECENT CWC
IN THOUSANDS) ONLY (1) ACQUISITIONS (2) CONSUMERCO NEW NTL
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Homes in Franchise 2,090 6,035 5,977 12,012
Homes Passed 1,288 4,177 4,286 8,463
Homes Mktd (CATV) 1,098 3,731 3,982 7,713
Homes Mktd (Tel) 1,098 3,002 3,982 6,984
Total Customers 497 1,655 1,197 2,852
Dual Customers 456 812 660 1,472
CATV-Only Customers 24 546 183 729
ResTel-Only Customers 16 298 354 652
RGUs (3) 954 2,447 1,857 4,324
Customer Penetration 45% 44% 30% 37%
RGU Penetration 87% 66% 47% 56%
CATV Penetration 44% 36% 21% 29%
ResTel Penetration 43% 37% 26% 30%
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1 NTL excluding acquisitions since January 1998.
2 Includes Comcast UK, ComTel, Diamond Cable, Cablelink and BT Cable.
Excludes 1G and 50% of Cable London.
3 An RGU ("Revenue Generating Unit") is one cable television account or one
telephone account. A dual customer represents 2 RGUs.
For further information, please contact:
FOR NTL FOR FRANCE TELECOM
IN THE US
John Gregg - 212 906 8440 Nilou Du Castel - 0033 1 4444 9393
Bret Richter - 212 906 8440 e-mail [email protected]
Michael Peterson 732 729 6200
Kathy Makrakis - 212 906 8457
IN THE UK
John Gregg - 0171 909 2000
Richard J. Lubasch - 0171 909 2000
Aizad Hussain - 0171 909 2000
Allison Smith - 01252 402662 / 07788 186154
Edward Bickham - 0171 413 3050 / 0467 310134
Dominic Shales - 0171 413 3142 / 0976 248321
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NTL is one of the largest telecommunications providers in the United Kingdom and
Ireland (based on numbers of customers). The company currently offers local
business and residential telephony, cable television and internet services over
cable networks to 25% of cable households in Great Britain and also has cable
franchises in Northern Ireland and the Republic of Ireland. Through its national
telecoms services division, the company owns and operates one of only five
independent national telecoms networks in the UK, and offers national business
telecoms, national and international carrier telecommunications services, and
satellite and radio communications services.
France Telecom is one of the world's leading telecommunications carriers, with
1998 consolidated operating revenues of 24.6 billion euros and operations in
more than 50 countries. France Telecom provides businesses, consumers and other
carriers with a complete portfolio of solutions that spans local, long-distance
and international telephony, data, wireless, multimedia, Internet, cable TV,
broadcast and value-added services. France Telecom held an initial public
offering in October 1997 and is listed on the stock exchange in Paris and New
York (NYSE: FTE).
CWC ConsumerCo is a leading provider of cable telephony services in the United
Kingdom. It is comprised of the residential cable, residential telephony,
residential Internet, business cable and digital television development and
services businesses of Cable & Wireless Communications plc. CWC ConsumerCo is
licensed to provide cable television services in 47 franchise areas, covering
approximately 6 million equity homes and approximately 420,000 businesses in the
UK. As at 31 March 1999, CWC ConsumerCo had approximately 1.2 million customers
directly connected for telecommunication services or cable television services.
CWC ConsumerCo also provides cable and telephony services to approximately
29,000 small and medium customers directly connected to its cable network. It
also provides residential Internet services.
France Telecom's initial investment in NTL is subject to Hart-Scott-Rodino
Antitrust Improvements Act 1976 approval and other normal closing conditions.
The closing of France Telecom's investment announced today is also subject to
the completion of NTL's acquisition of CWC ConsumerCo on the terms announced
today, as well as the approval of Bell Atlantic's Board of Directors, which is
expected on 27 July 1999, and other conditions. The transaction is expected to
close in the first half of 2000.
This announcement has been approved solely for the purposes of section 57 of the
Financial Services Act 1986 by Morgan Stanley & Co. Limited and Salomon Brothers
International Limited.
Morgan Stanley & Co. Limited ("Morgan Stanley Dean Witter"), which is regulated
in the United Kingdom by The Securities and Futures Authority Limited, is acting
as financial adviser to NTL in relation to the Transaction and to no one else
and will not regard any other person as its customer or be responsible to any
other than NTL for providing the protections afforded to customers of Morgan
Stanley Dean Witter or for providing advice in relation to the Transaction.
Salomon Brothers International Limited, which is regulated in the United Kingdom
by The Securities and Futures Authority Limited, is acting as financial adviser
to France Telecom S.A. in relation to the Transaction and to no one else and
will not regard any other person as its customer or be responsible to any other
than France Telecom S.A. for providing the protections afforded to customers of
Salomon Brothers International Limited or for providing advice in relation to
the Transaction.
