Adelphia for Sale

In a move that could trigger a $20 billion auction, Adelphia Communications Corp.'s new management has reversed course and agreed to explore a sale of the company.

Adelphia's new CEO, Bill Schleyer, had hoped to guide the company through Chapter 11, shed billions of dollars in debt, then consider selling the company in a year or so.

That would give operations time to improve and hopefully get a better price. But Schleyers hand is being forced by creditors and a partner in some systems to sell now.

Adelphia has valuable clusters in Los Angeles, South Florida and upstate New York, plus the entire state of Vermont. Many players would be interested in at least parts of the company.

Cox and Comcast will clearly be players. Time Warner would likely jump in, but may be constrained by an ongoing SEC investigation into past accounting practices.

 Pools of private equity money will also emerge, particularly if Adelphia sells off pieces.

Speaking of equity, the news was hailed as a "turning point" by the Commitee of Equity Shareholder of Adelphia, one of the parties to the Adlephia bankruptcy case that had called for the sell-off.
"The Equity Committee believes that a sale of Adelphia's operating assets offers the best opportunity to maximize recoveries for all of Adelphia’s constituencies, and particularly for shareholders," said Peter D. Morgenstern of Bragar Wexler Eagel & Morgenstern, LLP, which represents the committee.