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Comcast, Time Warner suggest joint bid for bankrupt Adelphia

Comcast Corp. and Time Warner Inc. have confirmed they'll team up in possibly bidding for the assets of Adelphia Communications Inc., the bankrupt operator of the nation's fifth-largest cable company.

"Comcast and Time Warner have agreed to work together to explore a joint proposal to the potential purchase of Adelphia's assets," Comcast spokesman Tim Fitzpatrick said.

The company declined to go into greater detail.

Industry observers had long suspected that the No. 1 (Comcast) and No. 2 (Time Warner) cable providers would collaborate on buying all or parts of Adelphia, which is considering selling itself as one way to repay its creditors.

Comcast or Time Warner probably would have been able to pull off a purchase separately, but by acting together, "it really puts those two in the driver's seat," said Ted Henderson, a cable analyst with Stifel, Nicolaus & Co. in Denver.

Close to 20 parties have expressed interest in bidding for parts of Adelphia, a company executive said this month.

Adelphia is splitting up its sprawling collection of cable systems nationwide into seven geographical regions to facilitate the bidding. It expects to have final bids toward the end of this year, and to make a selection early next year.

Comcast and Time Warner plan to bid for the company in its entirety. Among the specific Adelphia systems likely to be coveted by Comcast are those in the Los Angeles area and those in Florida.

Adelphia, with about 5.4-million subscribers, was forced into bankruptcy in 2002 after it was discovered that some company executives had defrauded the firm.

Time Warner has made clear its ambitions to get bigger, but Comcast has been saying its appetite was sated after it swallowed AT&T Broadband in 2002, ballooning from about 8-million subscribers to today's 21.5-million.

Why would Comcast go back into the buying pool now, inviting an almost inevitable pummeling of a share price damaged this year when it failed in a bid to buy the Walt Disney Co?

"They have proven over and over again their ability to execute and create value," said Rob Sanderson, a San Francisco analyst with American Technology Research.

Comcast's overhaul of AT&T Broadband into a profit machine won it respect from many who thought it might have bitten off more than it could chew.

The big question this time around is how high are bidders, including the Comcast-Time Warner combo, willing to go, given that Adelphia might require significant investment after the sale? Sanderson said some indications point to Adelphia being a fixer-upper, at least in some places.

"Satellite's been kicking some serious tail in taking new subscribers" away from Adelphia, he said _ and that's sometimes a symptom of a neglected cable infrastructure, one that lacks such add-ons as fast Internet and video on demand.

That said, he expects Adelphia to fetch "slightly north" of the $17-billion set as a target price this year by Adelphia management and creditors.

Comcast shares closed down 27 cents, or about 1 percent, at $27.87 yesterday in Nasdaq trading.

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