The creation of a European cable, Internet and free TV giant was halted today when UPC said that it could no longer afford the share issue it planned for the acquisition of SBS Broadcasting.
Mark Schneider, chairman and CEO of Dutch cable giant UPC, said: "Because of the continuing turmoil in financial markets [and] given UPC's current share price levels it is simply not practical to complete the transaction."
Since the deal was announced in March it has been rocked by outside forces. World stockmarket volatility forced the revision of the deal in April, while further market weakness and the lower than expected pricing of shares in UPC's Chello subsidiary drove UPC shares lower.
With UPC already holding 22% of SBS' shares and complementary assets on a geographical basis, the two companies are expected to work through the takeover setback. They recently launched two jointly-owned channels developed for multi-platform distribution and expect soon to unveil two more. "We will continue to work closely, particularly in the areas of programming, subscription services and new media as we seek to leverage our respective businesses to mutual advantage," said SBS chief Harry Evans Sloan.