Comcast to buy Philadelphia cable company for $7.05 billion, adds 1.25 million clients

November 17, 1999|By BLOOMBERG NEWS

PHILADELPHIA -- Comcast Corp. agreed yesterday to buy cable television company Lenfest Communications Inc. from AT&T Corp. and the Lenfest family for about $7.05 billion, adding 1.25 million subscribers in the Philadelphia area.

Comcast, the third-largest U.S. cable TV provider, will exchange 116 million Class A special common shares valued at $5.55 billion and assume $1.5 billion in debt. The agreement overrides AT&T's plan to buy the 50 percent of Lenfest that it didn't already own.

AT&T agreed in May to sell cable systems to Comcast and gave it options to buy others. In exchange, Comcast dropped out of the bidding for cable TV operator MediaOne Group Inc. Shedding Lenfest is expected to help AT&T, soon to be the largest U.S. cable TV company, win approval of its purchase of MediaOne.

"This transaction may reflect AT&T's desire to come closer to current cable TV ownership regulations," said Kevin Roe, an analyst at ABN Amro Inc., who has an "outperform" rating on AT&T.

Comcast Class A shares rose $2.6875 to $44 on the Nasdaq after climbing to a record $44.125. AT&T rose $1.50 to $47.50 on the New York Stock Exchange. The acquisition is expected to close in the first quarter.

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