Comcast’s Close to $800M Suscom Deal

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Comcast Corp. is close to a deal to purchase Susquehanna Media’s 230,000 cable subscribers in six states, but the sale price is below the $800 million Susquehanna was originally asking, investment bankers in the cable industry said last week.

Comcast, which already owns a 30% interest in Susquehanna as part of its 2000 deal to buy Lenfest Communications Corp., has always been a favorite to buy the properties because it holds a right of first refusal on any sale. Other bidders on the properties included a management group headed by former Susquehanna Media CEO Peter Brubaker and Patriot Media & Communications.

The deal comes as Comcast is moving toward its joint acquisition of Adelphia Communications Corp. with Time Warner Inc. That $17.6 billion deal, expected to close in the first quarter of 2006, will add about 1.8 million customers to the Comcast fold.

While the Susquehanna deal is much smaller, it will fill in gaps in Comcast’s cable footprint, particularly in Pennsylvania. Susquehanna’s largest system is in York, Pa., with about 90,000 customers; it also has systems in New York, Mississippi, Maine, Illinois and Indiana.

Susquehanna is currently the No. 17 MSO in the country and has been known as a progressive independent, having pioneered interactive-TV games (currently via Buzztime Communications) and electronic commerce, among other cable innovations.

Susquehanna Media parent Susquehanna Pfaltzgraff Co. put the systems, along with 33 radio stations, on the block in April as part of an overall divestiture strategy. In July, Susquehanna Pfaltzgraff sold its Pfaltzgraff Co. dinnerware and housewares business to Lifetime Brands Inc. for about $32.5 million in cash.

Bankers said that Cumulus Media was the winning bidder for the radio stations, valued at about $1.2 billion. Cumulus Media spokesman Marty Gausvik declined comment.

Susquehanna chief financial officer John Finlayson would not comment on the pending deal.

“We have not come to any final agreement,” Finlayson said. “I would hope we would come to a decision pretty soon. We don’t have a deal until it is signed.”

Some bankers familiar with the auction said that Comcast and Susquehanna basically have a deal in place, but are ironing out the particulars.

One executive familiar with both companies said a deal could be finalized in “days or weeks.”

Simmons did not return phone calls for comment. Brubaker was said to be out of the office until Oct. 12. He did not return calls seeking comment by press time.

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