Up to 12 expressions of interest in Cablelink are expected to have been lodged by today from cable and telephone companies considering paying around £300 million (€381 million) for the State-owned firm. Among those planning to submit outline, nonbinding bids by the noon deadline are NTL, UPC, TCI and Esat.
Esat confirmed last night that it would bid for Cablelink, 75 per cent of which is owned by its rival, Telecom Eireann. TCI, the United States' largest cable company, has already unveiled its bid which has the Independent newspaper group as a minority partner. NTL has not declared openly but is reckoned by industry observers to be sure to bid, while the Dutch group UPC declared its intentions earlier this month.
Apart from at least one "dark horse", analysts say they also expect a number of expressions of interest from financial consortiums, and at least one smaller Irish cable company, Cable Management Ireland. But no more than 12 of the 33 companies that received the 129-page information memorandum are expected to submit a document.
Today's deadline is for nonbinding expressions of interest, but those who do not submit an outline bid will be eliminated from consideration. NM Rothschild, the merchant bankers advising the Government on the sale, will take three to four weeks to compose a shortlist of as few as three companies.
While Esat would not say yesterday whether its would be a joint bid, industry sources last night suggested the Irish telephone company has in recent weeks been actively seeking a US cable partner for the venture. Observers say Esat need such a partner for two reasons; the company's expertise is in telephony rather than cable, and the £300 million price tag, plus a further £200 million investment, would place Esat under financial strain.
But the battle to buy Cablelink is a crucial one for Esat, industry analysts say. If the company succeeds in purchasing the company, it can mount a strong challenge to Telecom Eireann's supremacy in the telecommunications market. If Esat fails to buy Cablelink, it will find itself repositioned in the telecommunications market, behind whoever does.
The purchase makes equal sense for TCI, which would combine Cablelink's 350,000 customers with the 150,000 customers of Irish Multichannel, the cable firm jointly-owned by TCI and Princes Holdings, a subsidiary of Independent. TCI said this month such economies of scale would help drive down costs and telephone tariffs.
The Nasdaq-listed UPC said earlier this month it would try to buy Irish Multichannel if it purchased Cablelink. The Dutch firm has expanded aggressively in recent years, and now has operations in Austria, Norway, Belgium, France, Hungary, the Czech Republic, Slovakia and Romania.
Canada's largest cable operator, NTL, has already begun rolling out its cable service in Northern Ireland, through its subsidiary, Cabletel. Analysts say purchasing Cablelink would therefore give it economies of scale in the country as a whole.
