The auction for 900,000 secondary market subscribers within Cox Communications Inc.’s footprint is being delayed, with investment bankers saying last week that a decision on the systems won’t be made until at least mid-October.
According to deal brokers interviewed by Multichannel News, bidders for the systems — mainly the TCA Cable properties Cox purchased in 1999 — include Cebridge Connections, a private-equity bidder, possibly backed by Texas-based oil billionaire Robert Bass, Patriot Media & Communications and Bresnan Communications Inc. Mediacom Communications Corp., which was a contender in the early rounds, has dropped out of the running, these bankers said.
Cox, which put the systems on the block in March, had expected to make a decision on the sale in late September or early October. But some bankers familiar with the situation last week said that time frame is being pushed back as other potential bidders have complained that the Atlanta-based MSO has been slow to provide information on the systems.
Cox spokesman David Grabert would not comment on any possible bidder complaints, but said that the company expects to make an announcement on the winning bidder or bidders this month. He added that is still in line with Cox’s initial estimate that it would have a buyer or buyers for the systems by the end of the summer.
Officials at Cebridge and Patriot did not return phone calls for comment. Officials at Bresnan declined to comment, although at least one industry executive said that Bresnan, too, is no longer in the running for the systems.
While Cebridge, the St. Louis-based secondary market MSO headed by cable veteran Jerry Kent, is considered to be the front-runner, a private equity bidder, possibly supported by Bass, has also emerged, the bankers said.
Bass is no stranger to media. He founded $2.6 billion private equity fund Oak Hill Capital Partners in 1999 and has been an aggressive cable investor. Oak Hill backed overbuilder WideOpenWest, as well as Atlantic Broadband, which purchased 250,000 subscribers from Charter Communications Inc. for $735 million in 2004.
Books on the Cox systems initially went out in June. The systems are located in Texas (Lubbock, Midland, Amarillo, San Angelo and Abilene); North Carolina (Greenville, Rocky Mount, New Bern and Kinston); Humboldt County, Calif.; and smaller systems in Louisiana, Arkansas, Oklahoma, Mississippi and Missouri.
Cox bought the TCA systems in 1999 at the height of the consolidation frenzy in the industry for about $4,000 per subscriber. Those systems for sale could attract prices in the $2,000 to $3,000 per subscriber range. That would put the total price of the systems at between $1.8 billion and $2.7 billion, substantially below the $4 billion Cox spent when it purchased TCA Cable in 1999.