UPC, Telewest deal could be in cards

Cablers to switch shares in Liberty Media, UnitedGlobalCom

LONDON — United Pan-Europe Communications and Telewest are believed to be poised to sign off on a share swap that would partner the two cablers in the European market.

The complicated alliance is understood to involve UPC — Europe’s second-biggest cabler — taking over Liberty Media’s 24.6% stake in Telewest, the U.K.’s No. 2 cable company. In return, Liberty would up its shares in UnitedGlobalCom, UPC’s Denver-based parent, from its current 10%.

The deal is expected to include Telewest taking a 10% stake in UPC’s high-speed Internet service provider Chello (Daily Variety, June 1). This would give Telewest a foothold on the Continent and Chello access to Telewest’s 1.6 million British subs.

The partnership is viewed as particularly important to UPC, which some observers consider overextended after a series of acquisitions. Chello, according to one analyst, needs to be in about 9 million homes within five years to break even.

Although neither Telewest or UPC would comment on the possibility of a link-up, an announcement could come as soon as midweek. Chello completes its IPO on Wednesday and UPC shareholders meet Friday.

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