Venture capitalists eye NTL masts

CABLE TV group NTL is set to sell its valuable transmission masts division to a venture capitalist after the most likely trade buyer ruled itself out.

National Grid Transco spent £1.1bn recently buying 3,500 antennae in Britain from US-based Crown Castle and feared regulatory obstacles. Crown owns the BBC's transmission masts while NTL broadcasts signals for ITV.

National Grid owns, maintains and operates the high-voltage electricity transmission system in England and Wales.

Mobile phone operators keen to expand their networks may also face big problems, said analysts. 'It makes no sense for a mobile company as NTL's masts are in rural areas and there are still legal issues with putting mobile cell antennae on the same towers,' said one. 'Anyone wanting a network would go for Crown as it has lots of urban sites on BT exchanges.'

That is likely to leave the field clear for private equity groups such as Apax, Carlyle, Blackstone or 3i, any of which could borrow cheaply against the income stream from ITV.

This is the third time that NTL has tried to sell its masts business, which made £270m last year. A previous attempt in 2001 foundered when buyers balked at the £1.2bn asking price.

A second attempt, in late 2002, was scuppered because NTL was in the midst of talks with its creditors and any deal would have faced vetting by an unwieldy committee of bondholders.

The latest move comes as NTL tries to get into the high-speed internet business via BT landlines, in addition to its own cable network. It is teaming up with mmO2 to try to sell the Airwave advanced radio system to fire and ambulance services.

The manoeuvring is being interpreted as a bid by NTL chief executive Simon Duffy to put himself in pole position to run a merged company of both NTL and rival Telewest.