Creditors of the bankrupt Adelphia Communications Corp. have reportedly told Time Warner Inc. and Comcast Corp. that they would accept their $17.6 billion buyout offer for the nation’s fifth biggest cable operator if it were entirely in cash instead of a combination of cash and stock.
The Wall Street Journal said in Friday’s editions that chances are slim that Time Warner and Comcast will agree to those terms. But the newspaper said the counteroffer by Adelphia’s unsecured creditors committee is a sign that negotiations are advancing over Adelphia’s fate.
Adelphia has been operating under bankruptcy protection since June 2002, and has been soliciting bids for all or part of the company.
Time Warner and Comcast, the nation’s two biggest cable system owners, have said they have discussed making a joint bid but have never confirmed whether they have actually made one.
Comcast had no comment Friday on the newspaper report, said Tim Fitzpatrick, a spokesman for the Philadelphia-based company. Ed Adler, a spokesman for New York-based Time Warner, also declined comment.
The Journal said the current Time Warner and Comcast bid consists of $12 billion in cash and roughly $5.6 billion in stock in a new company that would be formed from Adelphia and Time Warner’s cable units. It cited unidentified people familiar with the discussions.
The stock being offered would be equal to roughly 15 percent of the equity in the new company, the newspaper said.
The report said the creditors would prefer all cash because they are uncertain that the 15 percent stake in the new company would be as valuable as the bidders expect.
The Journal said the Time Warner and Comcast are considered the leading bidding venture, but said a lower bid for the whole company has also been made by private-equity firms Kohlberg Kravis Roberts & Co. and Providence Equity Partners.
The Journal said Adelphia could make a decision on a winning bid within the next week or two. Any deal would have to be approved by the bankruptcy court.