Maclean’s U.S. cable dangling

Some prime U.S. cable systems may be coming on the market as part of the fallout from the $ 2.3 billion merger between Canadian cable giants Rogers Communications and Maclean Hunter Ltd.

Ontario-based Maclean Hunter owns a Detroit system with 114,000 subscribers and smaller systems in Jersey City, N.J., and Fort Lauderdale, Fla. Overall, its U.S. holdings total more than 500,000 cable subscribers.

Those systems may be worth $ 1 billion and there has been speculation that the acquiring company Rogers will sell off Maclean Hunter’s U.S. interests.

Although Federal Communications Commission rate regulation has cooled interest in U.S. cable systems, most of the major American cable operators would likely want to get their hands on Maclean’s assets.

“There’s a whole range of possible U.S. buyers,” said one analyst. “They have been negotiating to sell the U.S. assets for six months, so presumably there’s a group set up and it won’t take too long.”

The U.S. cable holdings are worth about C$ 1.5 billion ($ 1.1 billion), the analyst said.

Maclean Hunter could also look for a buyer in its own back yard. Last year, Canadian telco Bell Canada bought a 30% stake in Jones Intercable for $ 400 million with an option to acquire the rest of the company in eight years.

But Capitol Hill has expressed some concern about foreign ownership in the past and any new deals for domestic systems with foreign companies could draw scrutiny.

Maclean Hunter’s printing operations, its second-biggest revenue source after cable television, could also be up for grabs.

The printing ops would likely be split into business forms and commercial printing.

“The first name that comes to mind in business forms is (Toronto-based) Moore Corp.,” one analyst said. Moore will not comment on whether it would be a buyer but said the operation seems “pretty good.”

Maclean Hunter’s commercial printing operations could be lucrative, especially if they include a contract to publish Maclean Hunter magazines.

Quebecor likely suitor

Montreal-based Quebecor Inc. or its printing unit would be a likely suitor for Maclean’s printing assets. The company has already said it is in informal talks and would be open to acquiring some assets “if the opportunity arises.”

Other assets — like media, newspapers, magazines and broadcast operations — may also be jettisoned. Analysts say possible buyers are Montreal-based Power Corp., Quebecor, Telemedia or Hollinger Inc.

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