The Hotel du Cap, an institution which defines oldfashioned luxury and traditional French service on the Cote d'Azur, seems an inappropriate place to meet Mark Schneider.
The chief executive of United Pan-Europe Communications, the fastest-growing cable company on the Continent wears a well-tailored suit, speaks in a low voice with a gentle Midwest accent and seems perfectly at home sipping black coffee in the Riviera hotel.
But if one thing epitomises the Hotel du Cap's old-world chic it is the fact that it does not take credit cards. Mr Schneider, one of the emerging magnates of the new media, has built a pan-European business on more sophisticated means of payment than cash.
Mr Schneider is a member of the Denver-based Schneider family that controls UnitedGlobalCom, which has investments in cable TV and media businesses worldwide. He is one of a handful of US entrepreneurs who has brought a mixture of opportunistic deal-making, complex financial engineering and media expertise to the European market, helping to pioneer the broadband business on the Continent.
In recent years, UPC, which was founded in 1995, has conducted a $3 billion (€3.37 billion) shopping spree, buying up cable networks, broadcast companies, telephony services and high-speed internet providers to produce a customer base of more than 6.9 million subscribers in 12 countries in Europe.
The group is currently processing a planned $2.8 billion acquisition of a European broadcaster. And more deals are bound to be on the way.
"We appreciate that this is a scaleable business. If we stop the build-out now, it is a great business. But it is a better business if we keep going," Mr Schneider said in an interview in the south of France, where he was attending the Mip TV market. "You would kick yourself if you did not pick up assets now."
UPC may be close to completing the tortuous negotiations to buy one of the nine chunks of Deutsche Telekom's cable network currently up for sale. It has been in discussions about acquiring Telenet of Belgium. It has had on-again, off-again discussions with executives at Canal Plus, the French pay TV group, about possible co-operation ranging from a merger of the digital TV businesses in Poland, to crosspromotion across Europe.
The company is working with Sony and Disney to create a movie channel and pay-TV business to compete with the pay-TV titans Kirch in Germany and Canal in France. It has been in occasional touch with NTL, the leading cable operator in the UK. And there have been talks about tie-ups with telecommunications companies and mobile operators. "We talk to everybody right now," he said. "We look across Europe from east to west and north to south."
Mr Schneider's roving eye has given UPC continental reach, but at the expense of stretching the company's corporate finances. After a series of substantial bond offerings, the company had longterm debt of €3.9 billion. at the end of last year. Total liabilities were €4.7 billion against $6.8 billion in total assets.
The cost of borrowing to fund acquisitions, together with the start-up costs and restructuring expenses associated with some deals ate into the financial performance of UPC, which reported losses of €119.8 million last year. The company has forecast further losses as it aims to grow in 2000.
UPC's shares have tumbled as market confidence in new media stocks has crumbled, investors have lost patience with loss-making growth stories, and analysts have started to fret about the extent to which the company's expansion drive is sapping its financial strength. UPC, which was listed last year in Amsterdam and on Nasdaq, has seen its stock price in the US fall to $37.50 from a high just a few months ago of $79.40.
This has put strains on UPC's most recent deal, the $2.8 billion acquisition of SBS Broadcasting, which has free-to-air television and radio channels stretching from the Netherlands to Hungary. SBS, which is run by Harry Evans Sloan, another US businessman who made his fortune in the European media market, recently agreed to amend the terms of the deal to keep the acquisition on track.
The challenge now for Mr Schneider is financing further acquisitions while maintaining the support of his investors - UPC's main shareholders are Denver-based and Schneider-controlled UnitedGlobalCom as well as Microsoft, which owns a 7 per cent stake.
Mr Schneider says he is confident that investors are looking for "real businesses with real revenues" and points to UPC's several channels of revenue: Priority Telecom, which offers telephony services; Chello, which offers high-speed internet access through its broadband portal; UPC Media, which will include SBS Broadcasting, video-on-demand and UPC TV; and revenue from the growing number of cable TV users.
The funding strategy is a programme of initial public offerings of UPC subsidiaries that will give the businesses new flexibility and further resources. The company is expected to press ahead with an IPO for Chello, and Mr Schneider has indicated that he aims to list Priority Telecom by the end of this year and is working on plans for an IPO of UPC Media.
But the postponement of flotations of Alta Vista, the Internet portal, and Yes Television, the video-on-demand business, and the catastrophic market performance of World Online, the Dutch Internet service provider, underline the difficulties of technology IPOs.
But Mr Schneider's programme of product start-ups and service expansion shows no sign of losing steam. From the third quarter of this year, UPC will launch a digital set-top computing system that will be able to offer consumers video on demand as well as a personal computer function via the television. The company is also determined to extend UPC's penetration of the German market, whether it proves to be through the acquisition of a majority stake in a Deutsche Telekom cable franchise or by buying up local loops.
Even in and around the Hotel du Cap, Mr Schneider has ambitions. UPC has the cable franchise that serves a large stretch of the French Riviera and Mr Schneider suggests that by the time he returns next year, he hopes the company will have cabled up the hotel to enable him to watch the US Masters from his bedroom.
There are many more plans he would like to talk about, but he has to rush off for a meeting with a group of potential partners to discuss producing content for UPC's many platforms. He finishes his coffee, bids a polite farewell and heads off to another set of discussions. Given his aversion to cash, the coffees, presumably, will be put on his bill.
