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.