LONDON — U.K. cabler Telewest is in discussions for a partnership with Chello, the broadband Internet service provider owned by Euro cabler United Pan-Europe Communications.
UPC’s shares, which have lost 75% of their value in the past two months, rallied strongly on news of the talks.
Telewest is negotiating to take an equity stake in Chello, ahead of the ISP’s imminent flotation, in return for offering Chello’s broadband portal to its U.K. cable subscribers.
Both Telewest and UPC are backed by Liberty Media and Microsoft, with Liberty reportedly playing a leading role in bringing the two together.
Chello was originally due to complete its IPO this week, but this has now been delayed until next week. It recently announced a price range for the flotation of $3.1 million to $4.1 million, around half what the market was expecting.
That news caused a further plunge in UPC’s stock price, effectively wrecking the cabler’s planned takeover of Euro broadcaster SBS. But a deal with Telewest would go some way toward restoring UPC’s fortunes.