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Chello delays IPO
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May 30, 2000: 6:28 a.m. ET
Dutch ISP in 'strategic discussions', initial share offer delayed until June 8
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LONDON (CNNfn) - High-speed Internet service provider Chello, a unit of Netherlands-based United Pan-Europe Communications, said Tuesday it would delay its initial public offering until June 8 while it was in "strategic discussions."
UPC, Europe's largest broadband cable operator, earlier this month set Wednesday as the date for its sale of about 10 percent of Chello's equity - 26.9 million shares -- at between  13 and 17 a share, with listings in Amsterdam and on Nasdaq.
Explaining the postponement, UPC said, "During this extended time period, chello may conclude certain strategic discussions which would be relevant for future shareholders."
UPC's planned price range gave Chello a lower-than-expected valuation of about $4.1 billion, amid investor disenchantment with technology stocks. Earlier this month, both U.K. video-on-demand operator Yes TV and Telecity, a provider of Internet infrastructure and services, called off plans for initial share sales, citing the volatile state of the market for high-tech shares. Some high-profile online companies that came to the market in the preceding weeks, such as Dutch Internet access provider World Online and U.K. travel and entertainment booking service lastminute.com (LMC), have been disappointing performers.
UPC last week canceled its $2.8 billion acquisition of SBS Broadcasting, blaming the collapsing price of its own stock for scuppering the deal.
Chello at the end of the first quarter had 180,000 subscribers in Europe, Latin America and Australia, but is adding 3,000 to 5,000 customers a week, according to analysts.
UPC is 51 percent owned by Denver-based UnitedGlobalCom (UCOMA: Research, Estimates), while Microsoft (MSFT: Research, Estimates) has a 7 percent stake. UPC's software firm plans to take a 3.5 percent stake in Chello, and has an option to buy 10 percent. AT&T's (T: Research, Estimates) Liberty Media unit will also take 3.5 percent. 
-from staff and wire reports
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