Cablevision Ups Its Bid for Adelphia

Apr 19, 2005  •  Post A Comment

Cablevision Systems reportedly has followed through with its plan to sweeten its bid for bankrupt cable operator Adelphia Communications, submitting a revised offer that totals $17.1 billion.

The new offer, which was first reported Tuesday morning in The Wall Street Journal, at a minimum threatens the agreement in principle that Adelphia has reached with cable giants Comcast and Time Warner, which together offered to buy Adelphia and its more than 5 million subscribers for $17.6 billion in cash and stock.

Cablevision two weeks ago submitted an eleventh-hour cash offer of $16.5 billion.

As Adelphia has moved closer to picking a winning bid, Cablevision has surprised many by offering last-minute bids that have confounded analysts, particularly because the company has not revealed its motivation for pursuing Adelphia.

However, it is unclear whether the new Cablevision offer will have much impact. While Cablevision’s bid likely offers more cash than the Comcast-Time Warner offer and likely would give some Adelphia creditors additional comfort, most analysts have said Cablevision faces a difficult task convincing Wall Street that acquiring Adelphia’s far-flung cable systems is a good idea. Most of Wall Street has grown comfortable with the Comcast-Time Warner bid because both companies own systems near where Adelphia does business.

Time Warner and Comcast have proposed creating a separate company that would combine systems from Time Warner and Adelphia. Comcast, which holds a 21 percent stake in Time Warner’s cable unit and is keen on unwinding that stake, would be given cable systems totaling up to 2.5 million subscribers in exchange for the stake.