Adelphia Demands All Cash Deal from Leading Bidders

28 February 2005

Bankrupt US cable operator Adelphia Communications is blunt about what it wants from would-be buyers: cash, and lots of it.

Adelphia, which has been operating under Chapter 11 bankruptcy protection for nearly three years, is reportedly demanding $17.6 billion (€13.2bn, £9.2bn) in crisp, green bills from prospective purchasers Time Warner and Comcast - respectively America's largest and second largest cable operators.

The partners, for this joint venture only, have offered $12 billion in cash and roughly $5.6 billion in stock in a new company that would be formed from Adelphia and Time Warner's cable units.

Adelphia's creditors, however, prefer 100% cash because they are unconvinced the 15% stake in the new company would represent the value claimed for it by TW and Comcast. But the duo is thought unlikely to agree to an all-cash deal.

Waiting in the wings are private equity firms Kohlberg Kravis Roberts and Providence Equity Partners, which together have made a cash bid, albeit a smaller one, for Adelphia in its entirety.

The outcome of the auction is likely to be known within two weeks.

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