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Cablevision to Submit All-Cash Bid for Adelphia

Apr 5, 2005  •  Post A Comment

In another twist to two already percolating stories, Cablevision Systems on Tuesday reportedly prepared a $16.5 billion all-cash bid to buy bankrupt cable operator Adelphia Communications.

While speculation abounded last week that Cablevision might join forces with a private-equity consortium led by Kohlberg Kravis Roberts & Co. and Providence Equity Partners, an article on the Wall Street Journal Web site said Cablevision has decided to submit its own bid for Adelphia, which has around 5.3 million subscribers.

Cablevision’s bid comes at a time when Adelphia officials and creditors are already well into reviewing two other offers for the company. One offer, a $17.6 billion joint bid from Time Warner Inc. and Comcast Corp., is considered the likely winning proposal. The other offer, from KKR and Providence, totals around $15 billion.

Adelphia had said that it wanted to identify a winning bid by the end of the first quarter, but the complexities of the companies’ financials forced Adelphia to miss the deadline.

Whether Cablevision’s last-minute offer will have an impact on the final outcome of the sale remains to be seen. Most analysts have seen the Time Warner-Comcast bid as the most likely to succeed because of the clustering opportunities that Adelphia’s systems can offer both companies. Cablevision mainly has systems in the New York area, and thus would not achieve the kinds of efficiencies that Time Warner and Comcast could achieve-certainly something that could leave Wall Street cool to the idea of Cablevision’s offer.

Also weighing on Cablevision’s bid could be the internal turmoil at the company. At present Chairman Charles Dolan is locked in a battle with son and CEO James over the fate of Cablevision’s struggling satellite operation Voom. Charles Dolan has lobbied hard to keep the money-losing business going, while James Dolan has pushed to shut it down.