The Adelphia Communications Corp., which has operated under bankruptcy protection for the last two years, said on Friday that it would start accepting bids to buy the company after Labor Day.
Larger rivals, including Comcast and Time Warner Cable, are widely expected to make bids for Adelphia and its 5.5 million subscribers in 30 US states, some of whom are in valuable markets like Southern California, Florida and the Carolinas.
Adelphia, the fifth-largest cable system, has left open the option of emerging from bankruptcy and continuing to operate independently. It wants, however, to determine how much money it can raise in a potential sale to help pay back its creditors, who are owed about US$20 billion.
"Holding a bidding process does not mean we will sell the company," an Adelphia spokesman, Paul Jacobson, said. "We have preserved a pathway to emerge from bankruptcy."
Nevertheless, most analysts expect Adelphia to be sold for about US$20 billion, though there is uncertainty whether one or several joint bidders will buy Adelphia, or whether it will be broken into pieces and sold separately.
Adelphia's financial advisers, UBS Investment Bank and Allen & Co, which must be approved by the bankruptcy court, expect to start receiving bids in October. The bidding might go through several rounds. The advisers will set a deadline for placing bids and expect to conclude the process by the end of the year, though Jacobson said no dates were "set in stone."
Comcast and Time Warner Cable, the country's two largest cable operators, are considered front-runners in the auction because they are the strongest financially. Comcast also operates networks in Southern Florida that are adjacent to Adelphia's. A combination of the two might increase Comcast's strength in the region.
One cable operator that might not be interested in bidding for Adelphia is Cox Communications, the fourth-largest provider after Charter Communications. The company's parent, Cox Enterprises, said this week that it planned to make a US$8 billion bid to take its cable unit private.
Potential buyers will have to look at more than Adelphia's cable systems. The company is still involved in legal wrangling over the classification of assets held by the Rigas family. The company's founder, John J. Rigas, and his son Timothy J. Rigas were convicted last month of bank and securities fraud and conspiracy.
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