Microsoft has signed a letter of intent to invest $300m in United Pan-Europe Communications NV (UPC), the Dutch cable and telecom operator and subsidiary of United International Holdings (UIH), a global broadband communications provider based in Denver, Colorado. Microsoft will purchase 10.2 million shares in UPC’s initial public offering on the US and Dutch Stock Exchanges scheduled for February. The letter of intent opens a relationship between Microsoft and UPC under which the two companies said they would jointly develop projects to deliver internet, telephone and other interactive video services in Europe. The companies said they would also establish a joint committee to discuss technology issues and set specifications. The announcement comes immediately after Microsoft said it would be investing $500m in NTL, the UK cable operator to help develop its high-speed broadband network in UK and Ireland. UPC’s IPO is expected to raise between $1.11bn and $1.25bn. A total of 40 million shares will be floated at a unit price expected to be between $27.8 and $31.27. The IPO will leave UIH with 77.1 million ordinary share, representing a 63% stake in the its subsidiary. The offering will be handled by underwriters Goldman Sachs International and Morgan Stanley Dean Witter.
