US tycoon's £240m Telewest buy

AMERICAN tycoon John Malone is ready to spend a further £240m on struggling cable TV group Telewest. The bad news is that he wants to buy the group's bonds - 20% of the total at between 32p and 45p in the pound of their face value.

Telewest shares, once 563p, fell from 5p to 4.2p on fears that Malone's move signals end-game on the widely-expected debt-to-equity swap. There are fears that the swap will swamp present shareholders. An executive at Malone's Liberty Media said it favours a restructuring.

Liberty tried and failed to make similar moves at cable group NTL. At Dutch-based UPC, it got 30% of the debt. Malone already owns 25% of Telewest's shares but, in a debt swap, this could be massively diluted.

Telewest said: 'This shows his belief in the value of the business. But the share fall cuts the equity's value to £120m, while the bonds' current value is over 10 times that.'

Independent shareholders fear they will be drowned out by the big battalions such as Liberty and Microsoft, which owns 20% of the equity.

At Colt Telecom, big shot US investor Fidelity International, which owns 54%, is tightening its grip. Colt chairman James Curvey, 67, vacates the chair at end-year in favour of his Fidelity colleague, Barry Bateman. Another Fidelity man, Andrew Steward, becomes chief financial officer in June. Colt said: 'Fidelity has three directors out of nine.'