Cox Communications Inc. may have won the bidding for the
high-profile Prime Cable of Las Vegas system.
Cox and Tele-Communications Inc. were the finalists for the
300,000-subscriber system, sources said. And last Thursday, a TCI spokeswoman said her
company believes that the other company won.
"We're hearing that we're very pleased that
this other operator will be serving Las Vegas," TCI spokeswoman LaRae Marsik said.
"Although we won't be a part of the Vegas market, the company that will be there
is a reputable and strong operator."
Marsik wouldn't name who TCI believed the other bidder
was. Several sources have identified the last two bidders as TCI and Cox. Comcast Corp.
and Charter Communications Inc. also submitted bids, according to informed sources.
Cox vice president for public affairs David Andersen said
he couldn't comment. A Prime Cable executive could not be reached at press time.
Neither could Brian Greenspun, the Las Vegas Sun editor, whose family owns more
than 60 percent of the system's equity.
Most analysts believe that the system will sell for more
than $1 billion -- a figure that could be around $4,000 per subscriber, or 14 times system
cash flow, well above usual multiples. The system is in the fastest-growing part of the
country, and it is wired to thousands of hotel rooms, so it would command a big premium.
The acquisition would bump up Cox's 3.3
million-subscriber count by about 10 percent. Las Vegas would be its fifth-largest system,
after Phoenix (577,862 subscribers), San Diego (482,026), New England (420,396) and
Hampton Roads, Va. (392,008), according to company reports.
Separately, Cox and TCI officials confirmed last week that
Cox is negotiating to buy TCI's Tucson, Ariz., system, which has close to 100,000
TCI and city officials said Cox has signed a letter of
intent to buy the Prime system, while Andersen described the negotiations as
Cox has told city officials that the company faces a
deadline of June 15 to conclude the deal, and that it wants to change terms of the
existing franchise agreement.
The deadline stems from tax implications as a result of
Cox's plan to use proceeds from the sale of its central Ohio system to FrontierVision
Partners L.P. Cox closed the sale of that 85,000-subscriber system in December, and it
said it wanted to use the proceeds to buy another system.
Tucson telecommunications administrator Colleen Van Prooyen
said Cox made a franchise proposal, and the city has made a counterproposal. She said it
was possible that a deal could be completed by June 15, but that would be "a real
TCI and the city of Tucson have been at odds over franchise
terms for months. Marsik said TCI wants to sell the system because it would "further
the cluster that Cox has in the Arizona marketplace, and it really would be a good
agreement for both parties."
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