UPC To Offer To Acquire SBS Broadcasting, Significantly Expanding Its Media And Content Operations

United Pan-Europe Communications (NASDAQ: UPCOY: Amsterdam Stock Exchange (AEX):UPC) and SBS Broadcasting (NASDAQ: SBTV; AEX: SBSB) announced today that they have entered into an agreement whereby UPC is expected to make an exchange offer to acquire SBS, one of Europe's fastest growing television and radio broadcasting groups, in an approximately $2.8 billion stock and cash transaction valuing SBS at approximately $85.14 per share, based on UPC's current share price.

The transaction, which has the full support of the Boards of Directors of UPC and SBS, provides that UPC will initiate an exchange offer to acquire all of the issued and outstanding shares of SBS for (i) $40.00 per SBS share in cash, and (ii) 0.19048 shares of UPC Ordinary Shares A per SBS share subject to a collar mechanism explained below. The Board of Directors of SBS has recommended the transaction to all of its shareholders. UPC intends that all shares not purchased in the exchange offer will be converted into the right to receive the same cash and stock consideration as provided in the exchange offer, in a second step transaction following consummation of the exchange offer.

Concurrent with execution of the exchange offer, certain holders of common stock and options of SBS entered into agreements to tender or exchange all of their equity interests in SBS to UPC which, together with UPC's current interest represents 27.6% of the outstanding common stock, or 40.9% of the common stock on a fully diluted basis. In addition, Harry Evans Sloan, Chairman and CEO of SBS, is being nominated to join the UPC Supervisory Board.

SBS creates, acquires, packages and distributes programming and other media content in many of the UPC territories and elsewhere in Europe via television channels, radio stations and the Internet. SBS owns and/or operates ten television and 17 radio stations across ten European countries in addition to various promotional and destinational websites. Through its SBS New Media division, SBS leverages its proprietary content and its promotional and content aggregation expertise to develop digital content and Internet businesses.

UPC's expected acquisition of SBS builds on the previously announced strategic alliance between the two companies to link more closely their media content and distribution capabilities. SBS will join UPC Media to create the first real pan-European multi media platform operating in 18 European countries by combining SBS's strength in free-to-air broadcasting with UPCtv's significant presence in the multi-channel television sector.

Commenting for UPC, Mark Schneider, Chairman and Chief Executive, said: "This transaction represents another important step in the development of UPC Media's digital content and interactive programming strategy. Our broadband vision centers on the delivery of compelling content and services to our customers across a variety of distribution platforms, and SBS brings significant expertise in the development, acquisition and packaging of high quality content that we believe meaningfully enhances our ability to fulfill this vision. In particular, this transaction will benefit our UPCtv and chello internet divisions.

"We at UPC are excited about the opportunity to work more fully with Harry Evans Sloan and his SBS team to establish the first pan-European company with strength in all major content distribution windows. Furthermore, we view the significant geographic synergies between our existing cable and internet operations with those of SBS as an outstanding opportunity for expanding our advertising and e-commerce relationships in our local markets."

Harry Evans Sloan, Chairman and Chief Executive Officer of SBS, said: "The combination of SBS and UPC is very strategic. We are pleased to be joining forces, and we look forward to developing UPC Media into Europe's leading content player. For SBS, this is a natural alliance because UPC is a leading provider of cable services and content in most of our broadcast markets. Working together, we can accelerate the development of SBS' core businesses and new media strategies."

Andrew Barron, Managing Director of UPC Media, commented: "This is a major development for the media content business of UPC which will enhance the quality and breadth of our existing programming portfolio across entertainment, information, interactive and e-commerce content. This transaction will provide greater choice and higher quality video services to residential and business subscribers throughout Europe."

Howard A. "Woody" Knight, SBS Vice Chairman and Chief Operating Officer, added: "This transaction recognizes substantial value for SBS shareholders and is clearly advantageous for all our stakeholders. UPC is Europe's leading broadband communications company. Combining our strengths creates an unparalleled opportunity to accelerate the growth of both companies and to build additional shareholder value."