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Comcast, Time Warner Can Submit Joint Bid for Adelphia

Oct 25, 2004  •  Post A Comment

Time Warner and Comcast are free to submit a joint bid for the assets of bankrupt cable operator Adelphia Communications, The Wall Street Journal reported Monday.

Citing sources familiar with the situation, the newspaper said Adelphia’s board of directors decided to allow Time Warner and Comcast to combine their efforts in a joint bid for Adelphia, which put itself up for sale earlier this year amid an effort to emerge from federal bankruptcy protection following a massive accounting scandal.

Adelphia’s board had been considering requiring that Time Warner and Comcast submit separate bids in an effort to maximize the final price for Adelphia, which has around 5.4 million subscribers. Some analysts have estimated the final price for all of Adelphia could exceed $17 billion.

However, some sources familiar with the thinking of both companies indicated one or both cable companies might have opted not to make an offer if Adelphia’s board had demanded separate bids. Comcast in particular was seen as likely to walk away given it already has 21.5 million subscribers and has no need to get bigger.

One of the reasons Comcast and Time Warner are interested in submitting a combined bid is that it gives both companies a way to sever a series of ties that exist between the two companies. Among them: Comcast’s 21 percent stake in Time Warner Cable and $1.5 billion in Time Warner stock. In addition, the two companies are partners in a series of cable systems in Texas and Kansas.