Adelphia to be put on market

Time Warner, Comcast considering purchase of cable-TV operator

August 07, 2004|By BLOOMBERG NEWS

GREENWOOD VILLAGE, Colo. - Adelphia Communications Corp., the U.S. cable-television operator in bankruptcy proceedings, said yesterday that it will begin arranging a sale of the company after the Labor Day holiday on Sept. 6 and complete the auction by year-end.

The company's bankers, UBS Securities LLC and Allen & Co., will solicit bids for the entire company and for individual cable systems, Adelphia said. The bankers have held "informal discussions" with potential bidders, the company said.

Chief Executive Officer Bill Schleyer, 53, said on April 22 that the company may sell itself to raise funds and repay creditors who are owed more than $18 billion. Time Warner Inc. CEO Richard Parsons and Comcast Corp. CEO Brian Roberts have said they will consider buying some of Adelphia's assets to expand their cable-TV businesses.

Shares of Adelphia fell 2 cents, or 5 percent, to close at 38 cents yesterday in over-the-counter trading. The shares had traded as high as $32.66 in the six months before Adelphia filed for bankruptcy protection in June 2002. Roughly 17,000 claims seeking more than $3 trillion have been filed against Adelphia in the bankruptcy case.

Adelphia's assets would add customers to Comcast and Time Warner Cable, which have won fewer new subscribers in the past year than satellite-TV operators such as DirecTV Group Inc.

Comcast and Time Warner's cable unit are the two largest U.S. cable-TV operators, with 21.5 million and 10.9 million subscribers, respectively.

Adelphia founder John Rigas, 79, and his son Timothy, 48, were convicted by a jury last month of conspiracy, bank fraud and securities fraud for looting the company and lying about corporate finances. The fraud case against Michael Rigas, 50, ended in a mistrial, and former Assistant Treasurer Michael Mulcahey, 47, was acquitted of the charges he faced.

Schleyer, the former president of AT&T Corp.'s cable unit, was hired as chairman and chief executive in January last year. He filed a reorganization plan for the company to leave bankruptcy in February.

Less than two months after filing the plan, Schleyer said Adelphia may seek buyers for its assets after creditors said the company was worth more than the $17 billion valuation of his plan.

Adelphia is the fifth-largest U.S. cable operator, with 5.3 million customers.

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