Will dueling Dolans make bid for Adelphia?
NEW YORK — Wall Streeters were confounded Tuesday over reports that Cablevision — already engulfed in a bitter family boardroom fight over satcast service Voom — may link up with private equity partners and make an 11th-hour bid for bankrupt cabler Adelphia.
Key analysts covering the cable biz found it hard to believe that Cablevision would actually commit to such an offer, considering the voracity of the familial rift, which continued to play out even on Tuesday.
Analysts said they were still betting on the joint bid submitted by Time Warner Cable and Comcast. Duo’s offer for Adelphia is estimated to be in the $17.5 billion-$18 billion range.
Cablevision chairman and founder Charles Dolan has been feuding with his son, CEO James Dolan, for months over the Voom satellite service. James wants it shuttered, Charles wants it up and running and is trying to personally buy what’s left of Voom. The satellite that transmits the programming is set to be sold to EchoStar.
Chuck Dolan signed a petition posted with the FCC Tuesday on behalf of Rainbow DBS insisting the service is viable.
He revealed that Voom is seeking $400 million worth of cash and credit from controlling investors and said it “stands ready, willing, and able to compete for the purchase of the Rainbow DBS transponders … should they once again become available in the market.”
Statements contradict a previous filing in February that “the market has shown itself unable to sustain more than two nationwide DBS providers” — meaning EchoStar and DirecTV.
Fulcrum Global Media analyst Richard Greenfield called the latest filing part of a “continuing saga of nearly unbelievable events.”
Greenfield said while Cablevision’s entry could force TW Cable and Comcast to pay more for Adelphia, such a bid didn’t make sense, considering the uncertainty at Cablevision. He questioned who is doing the talking for Cablevision, whether the son or father or other board members.
Cablevision stock dove in trading as Adelphia speculation mounted. Shares were down $1.65 to close at $27.35, a 5.69% dip.
And Even Liberty Media chair-CEO John Malone — whom Chuck Dolan recently appointed to the board in a midnight raid — said TW Cable and Comcast have the upper hand in the hunt to capture Adelphia.
“At the end of the day, they have the scale, they have the management, they have the synergies. It’s sort of a no-brainer for them to buy it,” Malone said Tuesday at a Banc of America Securities investor confab in Gotham.
Cablevision declined to comment on the status of any discussions with Kohlberg Kravis Roberts & Co. and Providence Equity Partners, who have already submitted a bid worth about $15 billion for Adelphia.
If Cablevision joined up, the group could offer more.
Speaking separately Tuesday at a Banc of America confab in Gotham, Time Warner exec VP and chief financial officer Wayne Pace said, “From our standpoint, it doesn’t change anything. We’re pressing on as we’ve communicated in the past. If we can get a good deal, we will. If not, we’ll move on.”
Adelphia had wanted to announce the winning bidder by the end of this week. Adelphia’s creditors also have the option of rejecting the bids and emerging intact from bankruptcy.
(Jill Goldsmith contributed to this report.)