243K Charter Subs to Cequel?


Country roads could be leading Jerry Kent home, in a manner of speaking.

Several executives in the cable investment-banking community said the former Charter Communications Inc. CEO’s current firm, Cequel III LLC, has emerged as the winner in an auction of about 243,000 Charter subscribers in West Virginia and Virginia, including the capital city of Charleston, W. Va. An agreement could be announced this week, one person close to the process said.

The price tag was pegged at $750 million-$800 million by one person who was involved in the process. That’s a relatively pricey $3,000 and up per customer, indicating that Kent had to top rival bidders. The systems are being shopped for Charter by Daniels & Associates and JP Morgan Chase & Co.

Kent -- who formed investment bank Cequel III after leaving Charter in 2001 -- already has about 400,000 subscribers in several Southwestern states through his interest in cable operator Cebridge Connections.

Making a big step up in size, Cebridge already has a pending deal to buy 940,000 subscribers in secondary markets from Cox Communications Inc. for about $2.3 billion. That deal is expected to close in April.

Should Cebridge close its deals and rise above the 1.5 million-customer mark, it would surpass in size the eighth-largest U.S. cable company, Rocco Commisso’s Mediacom Communications Corp.

If the West Virginia deal goes through as expected, it would be the first time Kent has bought systems from his former cable outfit.

Cebridge spokesman Peter Abel and Charter spokeswoman Anita Lamont both declined comment. A Daniels official did not return phone calls.

The West Virginia operation is said to be in good shape -- 750-megahertz capacity, with 210,000 customers served from a single headend, with relatively strong high-speed-data penetration but no phone service. Another 33,000 customers are in Virginia.