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RealTime IT News

Comcast, TW Mull Joint Adelphia Bid

Comcast and Time Warner are considering a joint offer for bankrupt Adelphia .

Adelphia last week formally launched its sale process, entertaining bids on any or all of its seven clusters of cable systems. Bids for the nation's fifth-largest cable company are expected by year's end. Adelphia provides video and broadband Internet in 31 states and Puerto Rico.

Spokespeople at Comcast and Time Warner confirmed that a joint bid is being explored, but said it's much too early to discuss details.

It remains to be seen whether the companies would bid on some or all of Adelphia's systems, or how they would be divvied up if the offer was accepted.

What is clear is that the companies believe Adelphia is more likely to accept a deal for most of its assets from the team, rather than strike multiple smaller deals.

A successful deal could also help set the stage for Comcast to exit its investment in Time Warner Cable, which it inherited from a previous acquisition. Earlier today, Comcast announced that it had signed a pact with Time Warner allowing it to reduce its stake in Time Warner Cable from 21 percent to 17 percent.

In return, Time Warner would transfer 90,000 basic subscribers and approximately $750 million in cash to Comcast. The option can be exercised between Dec. 1, 2004 and April 1, 2005.

"It has always been our plan to dispose of our stake in Time Warner Cable expeditiously," Comcast CEO Brian L. Roberts, said in a statement. "This agreement marks an important step towards completing that goal efficiently while also maximizing value for our shareholders."

Comcast gained its Time Warner Cable shares two years ago as part of its $45 billion purchase of AT&T Broadband. The shares have been held in a trust controlled by the nation's largest cable operator.

For its part, Time Warner CEO Dick Parsons said the deal would allow the media and entertainment giant to increase its ownership in its cable company, which operates in a number of important markets, including New York.

While ending its position in Time Warner Cable has been long-stated, Comcast has been busy lately with other business moves, mostly concerning content.

First it tried to buy Walt Disney Co. to gain a library of films and TV shows that it could distribute to cable TV and high-speed Internet subscribers.

Disney CEO Michael Eisner rebuffed the offer and Comcast walked away from the deal, settling instead for a more modest content distribution partnership.

More recently, it struck a broad content distribution pact with Sony Pictures that includes plans to expand its video-on-demand menu.