Adelphia Auction Deadline Comes and Goes

04 April 2005

US cable company Adelphia Communications missed its self-imposed March 31 deadline to announce which suitor it will accept.

Currently operating under Chapter 11 bankruptcy protection, Adelphia is seeking a dowry of around $17 billion (€13bn, £9bn) in cash from prospective partners. It had promised to name the winner by the end of the first quarter.

However, executives are quick to stress that the delay is due to complex procedures rather than any breakdown in negotiations.

Says a spokesman: "It would be a mistake to read anything into having not made an announcement by March 31. We're pleased with our progress in a complicated process."

A joint bid by media giant Time Warner and cable titan Comcast is hot favourite to win Adelphia's hand, although its $12bn cash plus $5.6bn stock offer is not exactly to the scandal-beset firm's taste.

Negotiations between Adelphia and the TW/Comcast venture have been difficult. The two sides have not agreed on how to value the new cable company that would be created, or which side should suffer the loss if subscribers continue to leave Adelphia between the time the deal is announced and the time it closes.

In a further twist last week, Cablevision, America's seventh largest cable operator, was said to be throwing its hat into the ring alongside Kohlberg Kravis Roberts and Providence Equity Partners in a tripartite offer for Adelphia [WAMN: 30-Mar-05].

The KKR/Providence all-cash bid currently stands at around $15 billion, but would be increased if Cablevision joins the party.

Data sourced from Wall Street Journal Online; additional content by WARC staff