Board-Ansicht
Mix-Ansicht- Crisis at Christmas - leibovitz, 18.12.2001, 17:03
Crisis at Christmas
Winners and losers
Crisis at Christmas: One company’s crisis is another’s opportunity. That is a thought worth bearing in mind as yet more giant corporations go through the debt mangle. The two latest are NTL, the largest UK cable TV group, and Kirch Group, the German media empire. Both overextended themselves by relying on pyramids of debt to finance acquisition sprees. In NTL’s case, it was just a question of snapping up rival cable companies in the UK and across Europe. In Kirch’s, the hubris involved trying to corner Hollywood film rights, Formula One racing and the World Cup. Its E12bn of liabilities are roughly double the value of its assets.
Who will benefit from these corporate disasters? Once NTL’s balance sheet has been restructured probably via some sort of debt-for-equity swap, the obvious next step would be to merge it with Telewest, the UK’s second largest cable group. If that had happened a year ago, Telewest would have been the junior partner. Not now. Its £1.7bn market capitalisation is more than ten times NTL’s. Adam Singer, Telewest’s boss, would end up running the show. NTL’s Barclay Knapp, who has been too good at borrowing money for his own good, would be sent packing.
In Kirch’s case, Rupert Murdoch could be a big beneficiary. Again, it would be stupid to try to rescue the whole group. Far better to wait for balance sheet to be restructured and then pick out the best assets. ProSieben, the German TV broadcaster, is probably what Murdoch covets most. Snaffling it would somewhat make up for failing to buy DirecTV, the US satellite business. But first Murdoch will have to beat Silvio Berlusconi, the Italian prime minister who has also been eyeing ProSieben. And then he will have to navigate Bavarian politics. Not many Germans will want Murdoch dominating their TV market.
Author: Hugo Dixon
www.runningstories.com
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