Bids In on Comcast Subs

Bids for Comcast systems with about 400,000 subscribers in nearly four dozen nonstrategic markets were beginning to trickle in last week, with some cable operators and private-equity firms targeting some of the systems rather than the complete package, people familiar with the process said last week.

Comcast put the systems — scattered throughout the country in 46 markets including Maine, Virginia, New Mexico and Kentucky — on the block in late May. Comcast would prefer to sell them to one buyer. But the diversity of the properties — and that collectively they would need between $300 million and $400 million in upgrades — makes such an outcome more difficult.

Pricing for the systems would depend on which systems are sold and to whom, but some people familiar with the process estimate the properties could attract between $700 million and $1 billion, or between 6 times and 6.5 times cash flow.

The properties are said to have drawn interest from strategic buyers, including Bresnan Communications and Suddenlink Communications, and several private investors. The bids are said to have come in for specific groups of properties rather than the entire 400,000 subscribers.

Initial bids were due July 1, but Comcast is expected to accept offers for at least a few more weeks, sources said. New York cable investment banker Waller Capital is handling the auction for Comcast. Waller representatives did not return calls for comment. Comcast officials declined comment.

People familiar with the process said Comcast would like to wrap up a deal before the end of the year, ahead of the Feb. 9 federally mandated digital TV transition and upgrades related to the transition.