×
You will be redirected back to your article in seconds

Comcast collects

Giant buys Lenfest cabler for $6.6 billion

Comcast Corp. got a lot bigger Tuesday, agreeing to buy Lenfest Communications and its 1.25 million cable subscribers for about $6.6 billion in stock and assumed debt.

Lenfest, the nation’s ninth biggest cable operator, is jointly owned by AT&T Corp. and the Lenfest family. Its sale to Comcast fulfills a deal the Philadelphia cabler struck with AT&T earlier this year when the two were both bidding for MediaOne Group. The giant telco offered Comcast a three-year option to buy 1.25 million AT&T subs for $5.7 billion.

The deal also supersedes a previous agreement under which AT&T would buy the Lenfest family’s interest in Lenfest Communications.

The purchase calls for Comcast to pony up 116 million Class A special shares — worth about $5.1 billion at their current market price — and assume $1.5 billion in Lenfest debt.

Comcast shares jumped 6.5% on the news to $44.

The purchase expands the company’s already heavy grip on the mid-Atlantic cable market. Lenfest’s systems run through southeastern and central Pennsylvania, southern New Jersey and northern Delaware. The transaction also includes cable advertising firm Radius Communications and news programmer Tri-State Media.

“Comcast views the geographic consolidation of the Philadelphia marketplace as critically important to the company’s future,” said prexy Brian Roberts.

The Lenfest deal will also create the largest and most concentrated broadband operation in the U.S., Roberts added, noting that online and digital services will each generate an estimated $100 million in revenues next year. Comcast’s high-speed service Comcast@Home will have 145,000 customers by the end of this year in a footprint of 3.5 million homes.

Roberts made some of his comments during a conference for investors in Philadelphia. He said the company plans $750 million in capital spending this year and $1 billion in 2000, with the cash flowing mainly to recently acquired or swapped cable systems and to expanding the distribution facility of home shopping network QVC.

Wall Streeters and other industry players consider Comcast among the nation’s best managed and best clustered cable companies. Counting all pending acquisitions, Comcast will have doubled its subscribers to 8.2 million by the middle of 2000 from the year earlier. Some 85% of its cable business will be located in six regional clusters.

The company’s other assets include majority chunks of QVC and E! Entertainment Television cable nets as well as Comcast SportsNet and the Golf Channel.

Comcast’s May 1999 agreement with AT&T would allow AT&T to buy back up to 1.25 million subscribers from Comcast if the AT&T/MediaOne merger fails to close and the Comcast/Lenfest deal goes through. Both deals are expected to close in the first quarter of next year, although the AT&T/MediaOne combination is facing tough regulatory scrutiny and may be forced to shed some systems.

Separately, Comcast and Time Warner said they have agreed to swap Comcast’s Lake County and Tallahassee, Fla., cable systems for a Time Warner system in Indianapolis.

More Biz

  • Kevin Tsujihara

    Kevin Tsujihara's Ouster Kicks Off a Week of Major Disruption in the Media Business

    The sudden ouster of Warner Bros. Entertainment chief Kevin Tsujihara kicked off what is likely to go down as one of the most extraordinary weeks in Hollywood history, spelling enormous turmoil and transition across the media landscape. In addition to the news about Tsujihara, which comes amid a wider shake-up of leadership at AT&T’s WarnerMedia, [...]

  • Disney Fox mega deal acquisition Illustration

    Disney Completes 21st Century Fox Acquisition

    Before the East Coast airing of “Jimmy Kimmel Live!” ends tonight, Disney will formally seal the deal on its $71 billion acquisition of 21st Century Fox. “This is an extraordinary and historic moment for us — one that will create significant long-term value for our company and our shareholders,” Disney chairman-CEO Bob Iger said in [...]

  • Chinese Tech Firm Huawei Seeks Content

    Beleaguered Chinese Tech Firm Huawei Seeks Content for Expansion Into Southeast Asia

    One of the most surprising first-time attendees at FilMart is Chinese tech giant Huawei, which has come to Hong Kong to acquire the video content it needs to support its strategy of expansion into Southeast Asia. The company is currently embroiled in a PR nightmare as it defends itself against accusations that its equipment could [...]

  • Viacom HQ LA

    Viacom Goes to War With AT&T Over DirecTV Carriage Deal

    Viacom has declared war against AT&T, blasting the telco giant on several fronts as the companies wrestle over a carriage renewal deal that is vital to Viacom’s long-term financial health. As of today, Viacom has begun running crawls and promo spots on its channels warning viewers that Nickelodeon, Comedy Central, BET, MTV and other channels [...]

  • Peloton Sued for $150 Million for

    Peloton Sued for $150 Million for Using Drake, Lady Gaga Music Without License

    A group of publishers including Downtown Music Publishing, Pulse Music Publishing, ole, peermusic, Ultra Music, Big Deal Music, Reservoir, Round Hill, TRO Essex Music Group and The Royalty Network filed a lawsuit against Peloton for infringement of more than a thousand musical works, according to a statement from the National Music Publishers Association. The plaintiffs are [...]

  • Bruce Ramer Re-Appointed to Corporation for

    Bruce Ramer Re-Appointed to Corporation for Public Broadcasting Board

    Top showbiz attorney Bruce Ramer has been reappointed to the board of the Corporation for Public Broadcasting, the nonprofit org that administers federal funding for public broadcasting. Ramer, a partner at Gang, Tyre, Ramer, Brown & Passman, was elected chair of the CPB board in October. He previously served as board chair from 2010-2012. His [...]

  • Gary Knell

    Listen: National Geographic Chief Gary Knell on Disney Future, Fox's Legacy

    The marriage of National Geographic Partners and Disney, which becomes official today, is the proverbial brand match made in heaven. Disney is taking over the stewardship of Nat Geo Partners — a joint venture with the National Geographic Society — as part of its acquisition of 21st Century Fox. The transition comes at a time [...]

More From Our Brands

Access exclusive content