(When did Time-Warner and Comcast become partners? This can't be good for my rates.)
Time Warner, Comcast Buying AdelphiaFri Apr 8, 2005 03:48 PM ET
By Julie MacIntosh and Kenneth Li
PHILADELPHIA/NEW YORK (Reuters) - Media group Time Warner Inc. and its bidding partner, top U.S. cable TV operator Comcast Corp., have reached a deal
to buy bankrupt cable operator Adelphia Communications Corp. for nearly $18 billion, according to a source familiar with the matter. The tentative deal with Adelphia's creditors beat back a last-minute rival offer from cable firm Cablevision Systems Corp., which another source said was preparing a bid of $16.5 billion in cash.
Time Warner and Comcast have been viewed for months as the likely winners of the auction for Adelphia's 5.3 million subscribers. Adelphia is reorganizing its business in bankruptcy court, but it agreed more than a year ago to simultaneously entertain bids for its assets. The deal, finalized late on Thursday after several days of frenzied activity, is now subject to approval by a bankruptcy court judge and a majority of each class of Adelphia's creditors.
Time Warner, which is contributing a large percentage of the bid itself while Comcast antes up about $2 billion in cash, could stand to reap several key benefits from the acquisition. It could become the dominant multiple system operator in the highly sought-after Los Angeles market by garnering subscribers from both Adelphia and Comcast, Sanford Bernstein analyst Michael Nathanson said in a research note. And it can unwind a 21 percent stake Comcast owns in its Time Warner Cable business by trading some of its new Adelphia subscribers to Comcast.
Comcast, for its part, could get 2 million new cable subscribers and the chance to liquidate its stake in Time Warner Cable in a swap that could save it about $1 billion in taxes.
(more at link above)