News

UPC, Tele Danmark Seen as Nordic Bidders

12/05/1999 7:00 PM Eastern

Helsinki, Finland — There is speculation that United
Pan-Europe Communications N.V. and Denmark's Tele Danmark A/S are two potential
bidders for the cable systems owned by the Swedish and Norwegian phone companies.

The two telcos — Telia A.B. of Sweden and
Norway's Telenor A.S. — have received permission to merge from European
regulators, provided that they sell their cable holdings. Telia Infomedia TV has about
half of Sweden's 2.6 million cable subscribers, while Telenor Avide serves about 39
percent of Norway's cable homes.

Telia Infomedia spokesman Hans Larsson said a deal to
unload the cable systems could be announced within six months.

The EU views the Nordic market as one entity and wants to
keep telephony and cable holdings separate to prevent vertical integration.

UPC, Europe's biggest private MSO, and Danish telco
Tele Danmark are seen as potential acquirers.

A bid by UPC would not be a big surprise. Over the past
year, the voracious unit of Denver-based UnitedGlobalCom Inc. has bought its way into a
position of strength in Europe. The company now operates in 12 countries and has 5.6
million subscribers.

In August, UPC completed the purchase of Stjärn TV,
Sweden's No. 2 cable operator behind Telia Infomedia, for $350 million and $53
million in assumed debt. Stjärn has 250,000 subscribers and passes 422,000 homes.

In 1998, UPC bought top Norwegian MSO Janco (now UPC
Norway), which has 350,000 subscribers.

"In general, UPC is very aggressive in acquiring new
companies which fit into our triple-play strategy of providing Internet, telephony and
cable services," UPC North Europe CEO Lars Andersen said. "The sell-off of
Telenor/Telia's [cable business] is of interest. It would provide a strong position
in the cable market.

"It is not taken for granted that we will get
it," he added.

Tele Danmark director of public affairs Mikael Bonde
Nielsen said, "We have no special interest, but we are always looking at
opportunities and obstacles in the market."

By obstacles, Nielsen was referring to the possibility that
the company could be forced to sell its own cable holdings, which account for about 40
percent of Denmark's cable homes.

On Telia Infomedia's end, "there has been plenty
of interest from quite a few companies and a deal will be completed by next year,"
said Larsson.

N.M. Rothschild & Sons and D. Carnegie A.B. are
advising the sellers.

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