Cablevision Raises Bid for Adelphia to $17.1 Billion

Cablevision Systems Corp., despite widespread skepticism, has made a higher bid for Adelphia Communications, valuing the cable operator at $17.1 billion. This move comes after Adelphia agreed to a breakup fee of 2.5 percent of the sale price with Time Warner and Comcast if it switches to a different bidder. Cablevision's earlier offer was $16.5 billion, and it faces stiff competition from the joint bid of nearly $18 billion in cash and stock from Time Warner and Comcast.

Key Takeaways:

Cablevision has raised its bid for Adelphia Communications to $17.1 billion, surpassing its earlier offer of $16.5 billion.
Adelphia has agreed to pay a breakup fee of 2.5 percent of the sale price, totaling nearly $450 million at current bidding levels, if it switches to a different bidder.
Cablevision's bid faces competition from a joint bid of nearly $18 billion in cash and stock from Time Warner and Comcast.
Adelphia's 5.2 million customers, stretching from Los Angeles to Buffalo, may not align with Cablevision's 3 million subscribers in the metropolitan area.
Analysts believe Time Warner and Comcast could better mesh with Adelphia's operations due to their larger subscriber base.
Liberty Media chairman John Malone supports Cablevision's bid, citing the need for economies of scale and negotiating clout.
Malone also praised Cablevision's chief operating officer, Tom Rutledge, for his performance and potential in expanding cable operations nationwide.
Cablevision's founder and chairman, Charles F. Dolan, is reportedly not inclined to sell the company, despite analyst expectations of a possible sale.

Statistics:

Adelphia's value: $17.1 billion (Cablevision's current bid)
Adelphia's breakup fee: 2.5 percent of the sale price ($450 million at current bidding levels)
Time Warner and Comcast's joint bid: nearly $18 billion in cash and stock
Cablevision's subscribers: 3 million in the metropolitan area
Time Warner subscribers: 11 million
Comcast subscribers: 22 million
Adelphia's customer base: 5.2 million, stretching from Los Angeles to Buffalo

Sources:

"Wall Street Journal" (n.a.)