Cox Communications Inc. might sell systems with 900,000 customers, alleviating some debt parent company Cox Enterprises Inc. took on when it took the MSO private.
Cox said late Monday that it hired Citigroup Global Markets Inc., Lehman Bros. Inc. and JPMorgan Chase Co. to advise on the possible sale of systems including those obtained in the MSO’s $4 billion acquisition of TCA Cable TV Inc. in 1999.
Cable systems are currently typically valued at about $3,200 per subscriber, meaning that a sale could be worth about $2.8 billion.
Systems that could be sold include west Texas, covering the Lubbock, Midland, Amarillo, San Angelo and Abilene areas; North Carolina, serving Greenville, Rocky Mount, New Bern and Kinston; Humboldt County, Calif.; and much of Middle America Cox, mainly operations in Texas, Louisiana and Arkansas. MAC also includes certain systems in Oklahoma, Mississippi and Missouri.
Not in the sale pool: some operations serving the northwest Arkansas and Lafayette, La., areas.
This past December, Cox Enterprises spent about $8.5 billion -- including $1.9 billion in assumed debt from the MSO -- to buy out non-Cox Enterprise shareholders in Cox Communications. That took an undervalued Cox private -- a strategy Insight Communications Co. Inc.’s founders, with backing from The Carlyle Group, are now pursuing for that MSO.
Cox, the fourth-largest U.S. MSO, now has about 6.3 million basic-cable customers.