04.10.2005 02:11 PM
Media Companies to buy Adelphia Cable
Time Warner and Comcast have reached a tentative agreement to buy Adelphia Communications for nearly $18 billion, according to newspaper reports.
The two media companies agreed in principle to buy bankrupt Adelphia for between $12 billion and $13.5 billion in cash in addition to between $4.5 billion and $5.6 billion in stock in a company that would be created out of Adelphia and Time Warner’s cable unit, The Wall Street Journal and The New York Times reported last week.
Cablevision Systems also has expressed interest in acquiring Adelphia, which has been in bankruptcy since 2002. The Bethpage, N.Y.-based company, which serves about 3 million subscribers in the New York metro area, had reportedly offered $16.5 billion in cash, the Associated Press reported.
The companies met with a bankruptcy court judge last week to discuss procedures for completing a purchase and a final deal could be days away.
Adelphia’s board of directors, a committee representing unsecured creditors and the bankruptcy judge must approve the deal. Creditors have said they would like to obtain at least $17.5 billion from selling Adelphia’s assets, the AP reported.
As part of the deal, Philadelphia-based Comcast will contribute $2 billion and swap its 21 percent stake in Time Warner in exchange for 2 million of Adelphia’s 5.3 million subscribers. The deal also would allow Time Warner to take its cable unit public.
Adelphia filed for bankruptcy after founder John W. Rigas and others were accused of looting the company and cheating investors out of billions of dollars. Rigas and his son Timothy were convicted of conspiracy, bank fraud and securities fraud.
The company, which moved to the Denver suburb of Greenwood Village from Coudersport, PA, closed bidding on its assets in late January.
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