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Chello, Telewest eye pact
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June 5, 2000: 9:27 a.m. ET
Dutch ISP's parent looks for UK partnership as public offering nears
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LONDON (CNNfn) - Internet service provider Chello may soon be playing a British tune.
Cable company United Pan-Europe Communications, Chello's Dutch parent, is expected to unveil this week an alliance with U.K. cable company Telewest Communications by which Telewest may take a stake in Chello and offer its 1.5 million subscribers access to the ISP's services, according to a published report Monday.
The Wall Street Journal, quoting people close to the matter, reported Telewest stands to take a 10 percent stake in Chello valued at about  500 million ($467.7 million). A deal could also involve UPC taking over U.S. media investor Liberty Media's (LMG.A: Research, Estimates) 24.6 percent stake in Telewest in exchange for an undisclosed stake in UPC's parent UnitedGlobalCom (UCOMA: Research, Estimates), the paper said.
Chello, which offers high-speed Net access in seven countries, recently set the range within which it will fix the price of shares in its initial public offering, slated for June 8, at 13 to 17 - lower than analysts previously expected, reflecting investor disenchantment with recent new issues in the high-tech sector. In the so-called book building process, the company's investment bankers Morgan Stanley Dean Witter and Goldman Sachs are seeking to drum up institutional investor interest for the share sale in Amsterdam and on the U.S. Nasdaq market.
Late last month, Chello postponed its original plan for the IPO, citing "strategic discussions" that could affect the IPO. Many experts have speculated Telewest is the likely partner.
Spokespeople from Telewest and Chello declined to comment.
Shares of Telewest (TWT) fell 0.6 percent to 308.75 pence, while in Amsterdam, shares of UPC rose 1.8 percent to 30.05. 
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