Comcast's Smith Confirms Allen Talks - Multichannel

Comcast's Smith Confirms Allen Talks

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Charter Communications Inc. stock was up 23% Friday (48 cents per share), to
$2.55 each, after a Comcast Corp. executive affirmed speculation that the
Philadelphia-based MSO is negotiating with Charter chairman Paul Allen about
possibly obtaining some Charter systems.

Comcast executive vice president and co-chief financial officer Lawrence
Smith said at an analyst day conference in New York Friday that the MSO was
negotiating with Allen concerning its $725 million "put" rights for Charter
stock.

The deal has been anticipated for weeks. Earlier this week, Allen and Comcast
agreed to postpone the put agreement until May 30.

"We're trying to restructure the transaction," Smith said. "If we were just
to make the put to Paul Allen and do the thing, it's extremely tax-inefficient.
Our objective is to try to get some properties from Charter -- get the money
from Paul and get some properties. We're working through it."

Smith did not identify the properties, but he estimated the odds at 50-50
that a deal would get done.

Such a three-way deal would allow Allen to pump money into Charter that the
St. Louis-based MSO badly needs to pay down debt. Charter has several cable
systems near Comcast clusters, including New England and Texas.

Smith also alluded that Comcast would be willing to sell its interest in QVC
Inc. Liberty Media Corp., which owns 42.5 percent of QVC, exercised its exit
rights in February. Both parties have hired appraisers to value the network.

"We're looking at this really as a financial asset," Smith said. "We're going
to do what's right from a financial point of view. We don't believe QVC has any
great strategic value to us, so we're going to do what's right from a
balance-sheet and overall corporate-finance point of view."

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