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UPC snares $2.8B TV deal
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March 9, 2000: 10:08 a.m. ET
Dutch cable operator takes control of content provider; stocks swing sharply
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LONDON (CNNfn) - United Pan-Europe Communications (UPC) Thursday announced plans to take control of SBS Broadcasting in a $2.8 billion cash and stock deal by the region's largest broadband communications firm to acquire TV and film content for its interactive services.
Amsterdam-based UPC, which already owns 18 percent of Luxembourg-based SBS, said it would pay about $85.14 per share for the outstanding stock in a friendly deal that represents a 49 percent premium over Wednesday's closing price for SBS shares in New York. The stock is listed in Amsterdam and on the Nasdaq.
UPC, a unit of U.S.-based UnitedGlobalCom Inc. (UPCOMA), has more than 5.9 million cable subscribers across 12 European countries, and its cables pass 9 million homes. Software giant Microsoft (MSFT) and Liberty Media have a joint 15 percent stake in the Dutch firm after signing a joint venture last year to build on UPC's creation of a European Internet backbone through its Chello portal.
"It fits excellently in UPC's strategy of acquiring more content," analyst Johan Rol of Effectenbank Stroeve told Reuters.
SBS, formerly known as Scandinavian Broadcasting System, produces and packages a range of content distributed throughout Europe via TV, radio and the Internet, and is particularly strong in the Nordic region and central Europe. It also owns TV and radio stations in 10 European countries.
UPC is offering $40 and 0.19048 of its own shares for each SBS share. Stock in SBS (SBTV: Research, Estimates) soared 30 percent to 77.50 euros after the announcement while UPC's (UPCOY: Research, Estimates) stock slumped 10 percent to 225 euros.. Analysts said the size of the premium and doubts about UPC's ability to integrate the latest in a line of acquisitions drove the stock down.
The deal is scheduled to close in the third quarter of the year, subject to regulatory approval. 
-- from staff and wire reports
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UPC
SBS Broadcasting
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