London -- United Pan-Europe Communications N.V. (UPC), the
European unit of United International Holdings Inc., is moving quickly to prepare for its
mid-February initial public stock offering, which is expected to raise $650 million.
UPC CEO Mark Schneider said the initial public offering
would leave UIH with a majority of the company. He declined to be more specific about how
the shareholdings would break down once UPC has gone public, although analysts speculated
that UIH will retain 75 percent to 80 percent of UPC.
UPC was formed as the result of a 1995 consolidation of
UIH's European assets with those of Dutch conglomerate Philips Media N.V., which UIH
bought out in 1998.
Shares of UPC will trade on the Amsterdam Stock Exchange
and the NASDAQ exchange in the form of American depository receipts.
Analysts are bullish on UPC, which has systems passing
about 5 million homes and providing cable TV to more than 3.4 million subscribers. The
company is ramping up aggressive efforts in high-speed Internet access and telephony.
"UPC's multiservice strategy will create
substantial value for shareholders, since relatively low incremental investment is
required to provide these new services," Morgan Stanley Dean Witter & Co.
analysts wrote in a recent report.
Over the past couple of years, UPC has been one of the most
aggressive European cable players as it has traded and consolidated its holdings.
It now counts some highly regarded properties within its
portfolio, including Telekabel Austria, Janco Norway, TVD Belgium, MediaReseaux France and
various other interests in Hungary, the Czech Republic, Romania and Slovakia.
At a Jan. 12 presentation in Amsterdam, senior UPC
executives declined to say whether any of the proceeds of the IPO would be used for
further acquisitions. "At this point, the majority of the proceeds will go to network
development," chief operating officer Tim Bryan said.
But three days later, UPC made another major consolidation
move, announcing that it would buy the 49 percent of the Netherlands' United
Telekabel Holdings that it didn't already own from Dutch utility company Nuon N.V.
United Telekabel, in turn, owns 50 percent of the giant
A2000 Amsterdam system. UPC will pay Nuon $289.6 million in cash and stock for the stake.
It is unclear what will happen to MediaOne
International's 50 percent stake in A2000.
"We are interested in consolidating [A2000], but it
depends on what MediaOne wants to do," Schneider said.
A MediaOne spokesman declined to comment on whether or not
the company would sell its stake in A2000. But in a recent interview, MediaOne
International president and CEO Gary Ames appeared bullish on the operator.
"It's dead on target with MediaOne's
strategy and our focus on investing more in broadband networks, particularly in
Europe," he said. "We're quite happy with A2000."
Mike Galetto contributed to this report.