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Cablevision Still Pursuing Adelphia, May Sweeten Offer

Apr 11, 2005  •  Post A Comment

Cablevision Systems reportedly has not given up its quest for bankrupt cable operator Adelphia Communications. The company continues to perform due diligence as it considers sweetening a $16.5 billion offer that Adelphia rejected last week.

According to an article in Monday’s Wall Street Journal, Cablevision is expected to decide sometime this week whether to raise its offer, which was submitted at the eleventh hour last week just as Adelphia officials were close to choosing a winning bid.

Whether Cablevision will be successful remains to be seen. Adelphia last week agreed in principle to a $17.6 billion cash and stock offer submitted jointly by Time Warner and Comcast Corp., and though that deal has yet to be finalized, analysts have generally dismissed the notion that Cablevision might emerge a winner.

Part of what makes the deal appear difficult to analysts is the lack of apparent efficiencies in a Cablevision-Adelphia combination. A major reason Time Warner and Comcast’s bid has received Wall Street’s blessing is because both companies own systems near markets where Adelphia does business, which enables Time Warner and Comcast to squeeze out the kinds of synergies achieved with both size and clustering.