Cable Operators

Adelphia Taps Advisers: Quadrangle Out, Allen In

7/14/2004 5:51 AM Eastern

Adelphia Communications Corp. picked its advisers for the possible sale of the company -- a move that should set the auction process for the fifth-largest MSO in the country into high gear.

Adelphia, currently in Chapter 11 bankruptcy protection, is pursuing a dual path of emergence as a whole entity, as well as an outright sale of the company.

The MSO said it had selected Swiss banking giant UBS Investment Bank LLC and media-investment banker Allen & Co. as its financial advisers. New York-based law firm Sullivan & Cromwell LLP was selected as Adelphia’s legal advisers in the sale process.

Although the move was anticipated for weeks, the actual selection came as a bit of a surprise.

Late last month, several sources in the investment community said Adelphia was close to choosing UBS and New York investment banker Quadrangle Group LLC as its financial advisers. However, according to one source familiar with the process, Adelphia discovered that selecting Quadrangle might not pass muster with the bankruptcy court.

“Initially, Adelphia thought there would only be a few conflicts [with Quandrangle],” one source familiar with the process said. “They found a lot more.”

Quadrangle has been a major player in some large cable deals -- it was involved in Comcast Corp.’s acquisition of AT&T Broadband in 2002, and Comcast chairman and CEO Brian Roberts at one time served on Quadrangle’s advisory board. Quadrangle is also a large investor in Cablevision Systems Corp., and managing principal Steven Rattner serves on that MSO’s board of directors.

Adelphia would not comment on Quadrangle. Rattner did not return phone calls for comment.

In a prepared statement, Adelphia chairman and CEO William Schleyer said naming the advisers is the first step in the sales process.

“Although the selection was slowed somewhat by the constraints of the bankruptcy process, the company has been working diligently for the past several months preparing all of the necessary information and documentation to facilitate the sale and accelerate the auction process,” Schleyer said in a prepared statement.

“Under the leadership of this advisory group, we will continue to prepare the company to be sold,” he added. “Once court approval for their retention is obtained, we will launch the official sale process.”

Adelphia spokesman Paul Jacobson said it is unclear when the auction will begin. “Now we can start to look at a timeline,” he added.

Adelphia should attract a number of interested buyers, including Time Warner Inc., Comcast and Cox Communications Inc. The Denver-based MSO, with about 5.4 million subscribers, is likely to fetch a price of between $17 billion-$20 billion.

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