Shares in Cable & Wireless still down on Govt inquiry

– Shares in Cable & Wireless Communications have recovered after falling on Friday's news that the UK Government has referred NTL's planned purchase of CWC's cable business to the Competition Commission.

– Shares in Cable & Wireless Communications have recovered after falling on Friday's news that the UK Government has referred NTL's planned purchase of CWC's cable business to the Competition Commission.

C&W Communications climbed to 689p this morning, having dropped 65p to hit a low of 650p shortly after the announcement.

Stephen Byers, secretary of state for trade and industry, said that although Fair Trading officials had advised against the referral, he believed the acquisition raised sufficient concerns in the area of pay-TV services.

He said: "Effective competition in these growing markets is of central importance to the consumer to warrant the move. I am concerned about the possible effects on this developing market of the reduction in the number of cable operators from three to two."

NTL and CWC said they were disappointed, but they still hoped the deal could be concluded on time in the spring of next year.

Barclay Knapp, NTL Chairman, said: "We will comply forthwith to reach a rapid conclusion. We continue to believe the combination of the companies involved is in the public interest."

NTL announced it was buying the cable TV arm of C&W Communications for £8.2bn in July. This left only Telewest Communications as its only rival.



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