NEW YORK– Time Warner agreed Wednesday to sell a group of Southern cable systems to two investor groups, Renaissance Media Partners LLC and Morgan Stanley Capital Partners, for about $300 million.
The systems, in Louisiana, Missis-sippi and Tennessee, serve about 125,000 customers. The systems were put on the market earlier this year as part of an effort by TW to reduce its debt and improve the geographic clustering of its cable systems.
The deal reunites the systems with execs who used to oversee them, as Time Warner acquired the systems when it bought Cablevision Industries in January last year. Renaissance is a group of former Cablevision execs who, with Morgan Stanley’s backing, hope to buy more systems.
And because Time Warner only bought the systems last year, it is carrying them on its balance sheet at a higher cost than older systems, so the entertainment conglomerate faces very little taxes to pay on the sale, a spokesman for Time Warner Cable said. All the money raised will go toward debt reduction, he added.
The price was not disclosed, but sources said it was roughly $300 million. But the effective price is even higher because TW retained a small percentage of the systems, which it can sell in the future. Time Warner stock fell 56¢ to $60.50 Wednesday.