Bankrupt cable company Adelphia Communications Corp. may refuse to allow Comcast Corp. and Time Warner Inc. to make a joint bid for the cable company, the Wall Street Journal reported on Wednesday.
Comcast, the largest U.S. cable operator, and Time Warner, the second-largest, are in the preliminary stages of exploring a joint proposal to acquire all of Adelphia's assets, a source familiar with the matter told Reuters last week.
According to the Journal, which cited unnamed sources, Adelphia's board will discuss the possible joint bid on Wednesday at its scheduled board meeting. But in order to increase competition, the Adelphia board may decide not to allow Comcast and Time Warner to submit a joint bid, the newspaper said.
At the meeting, the board will examine whether the auction would yield a higher price if Comcast and Time Warner bid against each other rather than together, the Journal said, attributing it to people familiar with the situation.
Representatives at Adelphia, Comcast and Time Warner did not immediately return calls seeking comment on Wednesday.
Analysts say Adelphia's assets could draw bids totaling more than $17 billion.
The talks on a possible Adelphia bid came as time Warner granted Comcast an option to cut its stake in Time Warners' cable unit, a first step in ending a partnership both companies have been looking to dissolve.
Some Adelphia executives believe that Time Warner would likely bid for the entire company even if it doesn't join forces with Comcast, according to the Journal's article, which cited people familiar with the matter.
Adelphia executives think Comcast might be reluctant to bid by itself for all of Adelphia, the newspaper said. Such a deal could face regulatory obstacles because of concerns over Comcast's size.
Adelphia's management team originally didn't want to sell while in bankruptcy but changed its mind after strong opposition surfaced to a reorganization plan they proposed in February, the Journal said.
Company executives have said they will move ahead with the reorganization plan if the auction doesn't produce a high-enough price, the newspaper said.