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Cable television broadcasting industry

Adelphia Communications Corp. Bidding War Heats Up

Strategic Insights

— 2 min read

The bidding war for bankrupt Adelphia Communications Corp. has intensified with Cablevision Systems Corp. increasing its bid to $17.1 billion, reported by The Wall Street Journal. This move could potentially upset the competing offer from Time Warner Inc. and Comcast Corp. totaling $17.6 billion in cash and stock. Adelphia's creditors are likely to be enticed by Cablevision's offer, which includes a significant amount of cash. However, analysts still favor the Time Warner-Comcast bid due to the larger operators' extensive cable properties.

Key Takeaways:

  • Cablevision Systems Corp. has increased its bid for Adelphia Communications Corp. to $17.1 billion, surpassing the initial $16.5 million cash offer.
  • The Time Warner-Comcast bid, totaling $17.6 billion in cash and stock, is still seen as the frontrunner.
  • Adelphia's creditors may be more attracted to Cablevision's bid, which includes a significant amount of cash, as stated by analyst Meg Gelden.
  • The two larger operators, Time Warner and Comcast, have a stronger presence in the market with more cable properties bordering Adelphia's system.
  • Cablevision is perceived as a "spoiler" in the bidding process, according to analyst Matthew Harrigan.
  • Time Warner and Comcast have agreed in principle to buy Adelphia for nearly $18 billion this month.
  • Adelphia's creditors would receive $12.5 billion in cash plus a 15% stake in the new cable company under the Time Warner-Comcast deal.
  • Adelphia would pay Time Warner and Comcast a breakup fee equal to 2.5% of the purchase price if it sells to another bidder, totaling $440 million.
  • Adelphia employs over 1,000 people in Colorado and 14,000 nationwide, serving over 105,000 customers in Colorado Springs.
  • The company is working "as quickly as possible" to complete the bidding process, according to Adelphia spokesman Paul Jacobson.

Statistics:

  • $17.1 billion: Cablevision Systems Corp.'s increased bid for Adelphia Communications Corp.
  • $17.6 billion: Time Warner-Comcast bid for Adelphia Communications Corp.
  • $16.5 million: Initial cash offer by Cablevision Systems Corp. (later increased to $17.1 billion)
  • $18 billion: Proposed deal by Time Warner and Comcast to buy Adelphia for nearly $18 billion.
  • 2.5%: Breakup fee paid to Time Warner and Comcast in case Adelphia sells to another bidder, totaling $440 million.
  • $440 million: Breakup fee Adelphia would pay Time Warner and Comcast if it sells to another bidder.
  • 1,000: Number of employees Adelphia has in Colorado.
  • 14,000: Number of employees Adelphia has nationwide.
  • 105,000: Number of customers Adelphia serves in Colorado Springs.

Sources:

  • The Wall Street Journal
  • Bloomberg News
  • The Rocky Mountain News

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