A leading US telecommunications executive, whose NTL company is the front-runner in the race to acquire Cablelink, yesterday denied that he had offered to fix the bidding for the Irish company. Mr John Gregg, vice-president of NTL Incorporated, rejected claims by Mr Denis O'Brien of Esat Telecom, which is involved in a rival consortium seeking to acquire Cablelink, that in conversations with Mr O'Brien or Mr Massimo Prelz (chairman of Esat's Cablelink Committee) he had offered to fix the bid for Cablelink either through the formation of a consortium involving the other bidders or otherwise.
In an affidavit, Mr Gregg, said NTL's bid was submitted to investment bankers NM Rothschild on April 23rd.
The bid was for a consideration equal to 115 per cent of the highest offer to a maximum £525 million.
NTL believed its bid was entirely consistent with procedures specified by Rothschild on behalf of Telecom Eireann and RTE and there was no legal impediment to that bid being considered.
Mr Gregg also referred to NTL's latest bid of Wednesday last for Cablelink but said it would not be appropriate for him to disclose the precise sum. He could confirm that the amount was in excess of £525 million.
He referred to allegations made by Mr O'Brien in his affidavit concerning conversations and communications which allegedly occurred between the two men and their respective companies.
Mr Gregg said Mr O'Brien's account of the alleged discussions was grossly inaccurate and seriously misleading.
He said Mr O'Brien had claimed that Mr Gregg had suggested that Howberry Lane Ltd (the consortium led by Esat which aims to acquire Cablelink) and NTL should co-operate together and effectively fix the bid price so as to reduce the ultimate sale price. Mr O'Brien's allegations had received considerable publicity.
Mr Gregg believed the claims were likely to cause and had caused serious damage to the commercial reputation and business of NTL, particularly as it entered the Irish market in competition with Esat.
He wished to state the claims were absolutely untrue and unfounded and believed they were deliberately intended to inflict maximum damage on the commercial reputation and business of NTL and on NTL's prospects of acquiring Cablelink.
When entering new markets, NTL frequently considered whether to establish relationships with smaller companies which had local knowledge and experience or which had assets which may be valuable. NTL had had contact with Esat over several years and regarded it as a potential partner.
Mr Gregg referred to a meeting with Mr O'Brien and other Esat representatives in New York on April 15th last.
Mr Gregg had asked in general terms what Esat's strategy and intentions were.
The first mention of Cablelink in the conversation came from Mr O'Brien, he said.
He said Mr O'Brien had made a remark to the effect that the indicative bids for Cablelink appeared to him to be absurdly high. He stated Esat had put in the lowest bid at that stage and opined the highest had been made by NTL. Mr Gregg said he was not prepared to confirm this to Mr O'Brien as he did not feel it was consistent with NTL's obligations under the confidentiality agreement.
He informed Mr O'Brien that he believed it was public knowledge that Esat was having discussions with another US company, Charter Communications.
He again sought to ascertain from Mr O'Brien whether Esat was interested in a partnership agreement but Mr O'Brien was non-committal and left the room.
He then met Mr O'Brien outside and again queried whether Esat had any interest in a relationship with NTL. Mr O'Brien was again noncommittal and brought the conversation back to the Cablelink sale process.
Mr Gregg indicated NTL would be prepared to sell a 25 per cent stake in Cablelink to Esat if NTL's bid was successful and added such an arrangement would have to be cleared with Rothschild. Mr O'Brien stated Esat would require 50 per cent, Mr Gregg said.
He never said to Mr O'Brien that Esat and NTL should attempt to fix the bid price or that Esat and NTL would be in a position to fix the bid price at a reduced figure whether by involving all bidders in a consortium or otherwise.
He did not believe there was anything unethical or inconsistent with the sale process in any discussions he had with Mr O'Brien - nor did he get the impression from Mr O'Brien that he saw anything wrong with the discussion they had. On the contrary, Mr O'Brien appeared quite happy with the arrangement suggested by Mr Gregg provided Esat became equal partners in Cablelink with NTL, Mr Gregg said.
At no point did Mr O'Brien say that he felt their discussions were at variance in any way with the spirit or letter of the sale process.
On April 20th, Mr Prelz had informed him by phone that the 25 per cent interest which he had suggested to Mr O'Brien was unsatisfactory, Mr Gregg added.
