Cablevision Makes New Play for Adelphia

20 April 2005

Just as media giants Time Warner and Comcast thought their joint purchase of bankrupt US cable firm Adelphia Communications was in the bag, rival bidder Cablevision has upped the ante again.

It has now offered $17.1 billion (€13.1bn, £8.9bn) for the nation's fifth-largest cable operator, increasing its initial $16.5bn all-cash bid. The constituents of this latest proposal are not known.

Adelphia has already accepted the TW/Comcast offer of $17.6bn in cash and stock. [WAMN: 08-Apr-05]. The joint bidders had been hoping a bankruptcy judge would this week approve a breakup fee of $250m to $500m from Adelphia if the deal fails to go through. Adelphia has been operating under Chapter 11 bankruptcy protection since 2002.

Cablevision's new approach may prove more attractive to Adelphia's creditors because of its generous cash element. There are fears that stock values in the new company (to be formed on completion of the TW/Comcast purchase) may not hold up.

The entry of Cablevision into the game has taken some commentators by surprise. The family-run business has recently weathered internal conflict over its soon-to-be defunct satellite TV arm. It is also in dispute with New York city planners over a proposed stadium which would rival its Madison Square Garden venue.

But to others it makes good business sense. Cablevision serves around three million subscribers in the New York city area. At a recent investors conference, chief operating officer Tom Rutledge noted it has chalked up some of the best operating numbers in the industry and would export its successful strategy to other cable systems

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