Cablevision offer for Adelphia good as dead...?

salsadancer7

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Jun 1, 2004
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http://www.libn.com/breakingNews_detail.cfm?id=3536


Report: Ruling could trip up Cablevision's Adelphia bid
Apr. 20 2005 -- 3:58:42 PM EST
by KEN SCHACHTER
BETHPAGE - An expected judge's ruling could pose a new hurdle in Cablevision Systems' (NYSE: CVC) effort to buy bankrupt Adelphia Communications Corp., a report said.

The Wall Street Journal reported that U.S. Bankruptcy Court Judge Robert Gerber is expected to approve a $440 million breakup fee that Adelphia would pay to Time Warner and Comcast if their joint $17.6 billion bid ultimately is rejected.

Earlier this week, Cablevision upped its offer for Adelphia from $16.5 billion to $17.1 billion.

The breakup fee creates a complication for Cablevision because Adelphia's creditors would have to be compensated for the additional money they pay to Time Warner and Comcast. Cablevision, which joined the bidding about two months after Time Warner and Comcast, still could increase its bid to make it attractive to Adelphia's creditors, the story noted.
 
Well, the bankrupty court judge approved the $440 million fee that Adelphia would have to pay the joint bidders, Time Warner and Comcast, if the deal isn't completed.

Sounds like a done deal that keeps Cablevision out of buying Adelphia.

I find it a major inconsistancy that Cablevision would be willing to pay $17.1 billion in mostly cash to gain 5.3 million cable subscribers. That's $3,226 per existing customer. With their current profit margin, how many years would it take to recoup this investment?

Question to the forum is "Given that this is the last large cable company that Cablevision was interested in, does it change anything about Cablevision offering a High Def satellite service??"
 
The Bankruptcy Court Judge approved the $440 million breakup fee that Adelphia would have to pay if they don't go through with the deal.

Looks like Cablevision isn't getting Adelphia.

Maybe they should persue some kind of satellite service offering lots of HD programming. Nay, they probably wouldn't stick with it.
 
What Im wondering is if, for those like me who have gone the TW or Comcast alternative to replace voom on 30th, this deal tween A & TW/CC means anything. What I mean is will we the consumer benifit at all from this?
 
IT'S DONE...TW/Comcast are new owners!!!

The Hollywood Reporter Story Here
April 22, 2005

TW, Comcast OK $17.6 bil bid for Adelphia

By AP
NEW YORK -- Time Warner Inc. and Comcast Corp., the two largest cable TV companies in the country, announced Thursday that they had reached an agreement to buy the assets of the bankrupt cable company Adelphia Communications Corp. in a deal valued at $17.6 billion in cash and stock.

The deal beat out a last-minute bid by Cablevision Systems Corp., a New York-area cable TV company, and still faces several steps before closing, including approval by regulators and bankruptcy court.

Time Warner and Comcast will pay $12.7 billion in cash and 16% of the stock in Time Warner's cable subsidiary, Time Warner Cable Inc., which will become a publicly traded company at the time the deal closes. A source close to the deal but speaking on condition of anonymity valued the stock part of the payment at $4.9 billion. Time Warner and Comcast will also swap cable customers.

As part of the multipart deal, Comcast will give back its 21% interest in Time Warner Cable and pay about $1.5 billion in cash. It will wind up with an additional 1.8 million cable subscribers as a result of the deal. Time Warner will gain 3.5 million subscribers.

Investors applauded the news that a final deal had been reached after several months of discussions. Time Warner's shares rose 28 cents or 1.7% to $17.21 in early trading on the New York Stock Exchange, while Comcast rose 63 cents or 2% to $32.13, also on the NYSE.

For Time Warner, the transaction marks the first major acquisition since the disastrous merger with AOL in 2000. Since then, the company has disposed of several businesses including its music company, bolstering its balance sheet in the process.

After the deal closes, Comcast will maintain its lead as the largest cable TV company in the country, with 23.3 million customers, and Time Warner will remain No. 2 with 14.4 million subscribers.

The deal expands the reach of both Time Warner and Comcast, and allows them to arrange their subscribers more efficiently in geographic clusters, making it easier to save costs and make upgrades to cable systems.

For Time Warner, floating shares in its cable company also allows investors to assign a separate value to the company's burgeoning cable business, which has been growing strongly due to new revenues from premium services like high-speed Internet, digital cable service and voice telephony.

Having a separately traded stock in a cable company will also provide Time Warner with a "currency" with which to make future acquisitions in the cable business, something that Time Warner CEO Dick Parsons has said he wants to do.

"This structure gives us an awful amount of flexibility" for growing the cable business and also regulating Time Warner's exposure to it, Parsons told analysts on a conference call Thursday.

Parsons also said he expected to keep the dual-stock structure in place for the long term, meaning the company didn't intend to sell off the cable business to Comcast or another company.

The companies said they expect the deal to close in the next 9 to 12 months.

Adelphia, which is based in Colorado, has been operating under bankruptcy protection since 2002 after collapsing in an accounting fraud and corporate looting scandal. Company founder John W. Rigas and his son Timothy were convicted of conspiracy, bank fraud and securities fraud.
 

Voom should enable OTA permanently!

New Letter From Voom

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