Wednesday, April 20, 2005

Time Warner and Comcast to Acquire Adelphia

Time Warner and Comcast finalized a deal to acquire Adelphia Communications for $12.7 billion in cash and 16 percent of the common stock of Time Warner's cable subsidiary, Time Warner Cable Inc. The transaction is subject to approval by the U.S. Bankruptcy Court where Adelphia bankruptcy proceeding is pending.

Adelphia, which ranks as the fifth largest MSO in the U.S., serves approximately 5.2 million basic subscribers in 31 states.

Under the deal, Adelphia's stakeholders will receive $9.2 billion in cash and 16 percent of Time Warner Cable's common equity from Time Warner. In addition, Comcast will pay Adelphia $3.5 billion in cash.

Under proposed transactions between Time Warner and Comcast, the two companies will swap cable systems to enhance their respective geographic clusters and unwind Comcast's investments in Time Warner Cable and Time Warner Entertainment Company.

Bill Schleyer, chairman and CEO of Adelphia, said, "After extensive review of all options for the company, Adelphia's Board of Directors has determined that this transaction delivers the maximum value to its bankruptcy constituents. We believe that this option is superior to Adelphia emerging as a standalone company."

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