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April 9, 2005
 
Time Warner, Comcast to buy Adelphia
Reported deal $17.6B in cash, stock for bankrupt operator

by HNN staff
 
San Francisco, Calif. (HNN) – Time Warner [NYSE: TWX] and Comcast Corp. NYSE: CVC] have reached an agreement in principle to buy Adelphia Communications Corp. [NYSE: ADLNQ] according to media reports late Thursday. - The cable giants have agreed to pay $12 billion in cash and slightly more than $5.6 billion in stock in a company that would be created out of Adelphia and Time Warner's cable unit, the Wall Street Journal reported on its Web site, citing unnamed sources.
 
A final deal could be days away, The Wall Street Journal reported. See Wall Street Journal story.
 
Representatives of the cable companies and Adelphia (ADELQ: news, chart, profile) met with a federal bankruptcy judge Thursday to discuss final procedures for completing a purchase, The Journal reported. The deal must be approved by Adelphia's board of directors, the committee representing unsecured creditors, and the judge.
 
The New York Times reported Comcast will contribute cash and swap its 21 percent stake in Time Warner's cable business in exchange for about two million of Adelphia subscribers. The Times cited unnamed executives
 
Calls to Time Warner (TWX: news, chart, profile) and Comcast were not immediately returned.
 
Adelphia spokesman Paul Jacobson said Thursday night that the company had no comment.
 
On Tuesday Cablevision Systems Corp. (CVC: news, chart, profile) bid $16.5 billion for Adelphia, according to a media report.
 
Adelphia, the nation's fifth-largest cable company, has been operating under bankruptcy protection since June 2002.
 
Investors lost billions when Adelphia collapsed in 2002 in the wake of disclosures that members of the company's founding Rigas family were charged with allegedly siphoning millions of dollars of Adelphia funds for personal use and misrepresenting the company's financial condition, the Journal said.
 
The scandal forced the company to seek Chapter 11 protection and resulted in the conviction last summer of John Rigas, Adelphia's founder, and his son Timothy, Adelphia's former chief financial officer, on fraud and conspiracy charges. They are awaiting sentencing.
 
CIBC weighed in early Friday, saying it's relieved to see the companies complete the deal without raising their bid but it remains "pretty eager" to see if the cash component exceeded $12 billion.
 
On Thursday Comcast (CMCSA: news, chart, profile) (CMCSK: news, chart, profile) shares closed up 28 cents to $33.28.
 
Time Warner rose 32 cents to $17.88, while Adelphia was unchanged at 25 cents.
 
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