Microsoft directors abandon ship at Telewest
Microsoft has decided to withdraw its three non-executive directors from Telewest's board, leading to heightened speculation that the troubled cable firm could soon undergo major restructuring.
Telewest announced the departure of the three board members on Wednesday morning. Microsoft, which owns 23.6 percent of Telewest, is entitled to three places on the board.
In a statement released by Telewest, Microsoft said it would now be easier to evaluate its future involvement with the cable firm.
"At present we believe that we will be in a better position to manage our relationship with, and investment in, Telewest without board representation. Microsoft expects to continue to evaluate Telewest on an ongoing basis and, in that regard, will continue to consider, among other things, purchasing or selling Telewest securities or engaging in possible strategic transactions involving Telewest. Microsoft has no current plan regarding any such transactions, but reserves the right to change its plans at any time," said Microsoft.
Telewest has debts in excess of £5bn. Its share price, which peaked above 550p two years ago, now languishes below 10p.
Investors took the news that the three Microsoft directors have departed as an indication that the US software giant was unlikely to launch a rescue bid for Telewest. This pushed Telewest's shares down around 5 percent, from 9p at the start of Wednesday's trading to 8.55p before lunch.
Earlier this month Telewest announced a range of cost-cutting measures, and cut its workforce by 1,500 people.
Some analysts believe Telewest will have to follow the example of fellow cable firm ntl and undergo a major restructuring. This could pave the way for a merger of the two companies.
Telewest has recently announced several new broadband initiatives.
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