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Gates takes stake in Cox

Microsoft's constant stalking of cable operators has taken on a new level of intrigue as a securities filing shows that two entities controlled by Microsoft Chairman Bill Gates have bought a $500 million stake in Atlanta-based Cox Communications.

An SEC filing shows that Gates's personal holding company, Cascade Investments, and the Bill and Melinda Gates Foundation bought a combined 13.5 million shares of Cox Communications in October.

The seller? Cox Enterprises Inc., the MSO's parent, which is controlled by the Cox family. CEI wanted the cash to pay down debt, not surprising given that its four business units are terribly vulnerable to a recession: TV stations, newspapers, radio and a wholesale used-car auction house (at a time of 0% deals on new cars).

Cox's sale was disclosed around the time of the deal, but the name of the buyer was not. Late Wednesday, though, the company filed the full agreement, which names Gates. The deal comes to around 3% of Cox Communications' outstanding shares, and Wall Street executives said that Gates has been buying more shares in the open market.