Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK), a European cable operator is reportedly holding talks to acquire Intel Corporation (NASDAQ:INTC) Media, according to a report from Bloomberg citing unidentified sources. This deal may create problems for Verizon Communications Inc. (NYSE:VZ), which was expected to be in advanced discussions to take over the internet-based subscription TV service.
Buyers with vast experience
Both prospective buyers are immensely experienced in subscription TV. Verizon provides its TV service through its FiOS unit, whereas London-based Liberty Global recently took over Virgin Media for $24 billion. Virgin Media is the second best service provider in the U.K. with about 5 million customers. John Malone’s Liberty Media holds a substantial stake in pay-TV providers including a stake in Charter Communications, the fourth largest company in the U.S.
Earlier in the year, Intel revealed plans to launch hardware and software allowing access to live TV, on demand TV and content streaming. The launch was supposed to be offered this year, but Intel postponed the launch to 2014.
Hurdles faced by Intel
The chip maker has been struggling to launch the service despite the fact that it hired hundreds of people including Microsoft Corporation (NASDAQ:MSFT) and BBC executive Erik Huggers to lead its business. It even tested the services at the employees’ homes.
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Time Warner Cable Inc (NYSE:TWC) and other cable TV providers have been convincing other channel owners to break the deal with Intel and also with other internet based TV providers, which made it tough for Intel to seal a partner for TV programming.
Shares of Liberty Global dropped 1.2% to $79.48 on the New York exchange yesterday. Year-to-date, shares are up 26%. Intel Corporation (NASDAQ:INTC) shares gained 0.3% yesterday and year-to-date the stock is up 17%.
A spokesman for both Intel and Liberty Global declined to comment on the development, according to Bloomberg.