A private-equity consortium was yesterday engaged in talks with UK cable company NTL:Telewest about a potential £10 billion takeover that would be Europe's biggest leveraged buyout.
According to sources the group is being led by US buyout firm Providence and includes fellow US firms Kohlberg Kravis Roberts and Blackstone, and Britain's Cinven.
"It's just a question of NTL deciding whether or not they want to go ahead," one of the sources said.
But another added: "It's still in the early stages."
NTL, KKR, Blackstone and Providence declined to comment. Cinven was not immediately available.
The cash-rich private-equity firms have been circling NTL for months, and approached the company last year before it closed its £3.17 billion acquisition of its smaller UK cable firm Telewest, which has thousands of customers in Birmingham and the Black Country.
NTL-Telewest is faced with an increasingly difficult competitive climate as it battles with rivals like BSkyB and BT to offer bundles of TV, broadband and phone services.
It said earlier this month that it lost a net 18,900 customers in the second quarter.
The bid approach comes as private-equity firms - which buy companies using mostly debt - have raised billions in fresh funds and are aggressively competing in ever larger deals.
Cable companies are a favourite private-equity target, in part because they produce a steady stream of cash that can be used to repay debt.
A deal to acquire NTL would be Europe's biggest leveraged buyout, surpassing a deal in which private-equity firms including Blackstone, Providence and KKR snapped up Danish telecoms firm TDC last year for £7.46 billion.
Firms typically put up one-third cash and borrow the rest in a leveraged buy-out deal.
It would also be the second biggest buyout on record anywhere after KKR, Bain Capital and Merrill Lynch Private Equity agreed last month to acquire US hospital chain HCA for £11.22 billion.
NTL completed its £961 million acquisition of Virgin Mobile last month, making billionaire entrepreneur Sir Richard Branson the cable company's biggest shareholder and giving him a seat on its board.
However, the deal included a clause that blocks Sir Richard from backing a sale against the board's wishes.