Quadrangle, UBS Close to Bank Deal

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Adelphia Communications Corp. is close to selecting advisers for the possible sale of its cable assets, with New York-based investment banker Quadrangle Group LLC and Swiss banking giant UBS AG leading the pack, according to sources in the financial community.

Adelphia, which filed for Chapter 11 protection in June 2002, is still pursuing a parallel path to emerge from bankruptcy as a whole company. But hiring Quadrangle and UBS could sway the Denver-based MSO more toward a sale.

Approval is needed from the bankruptcy court and Adelphia's creditors, but the decision could be announced soon.

“There is a long process,” said one member of the financial community that asked not to be named. “It's entirely possible that it may get announced and never happen. We're dealing in a very mercurial world.”

Adelphia spokesman Paul Jacobson declined to comment, as did Quadrangle managing principal Steven Rattner.

Adelphia has been moving ahead with reorganization and planned to emerge from bankruptcy intact this year. But in April, after objections from several creditor groups, Adelphia said it would consider an outright sale as well.

Adelphia was in the awkward position of having to select an adviser with no potential conflicts of interest in the sale. That left out virtually every major banker — many of which have done business with Adelphia at one point — and led the company to look more closely at smaller firms.

Published reports had indicated boutique investment houses Allen & Co. and Jeffries & Co. were also being considered.

Rattner started the media and entertainment practice at Lazard Frères & Co. in 1989, and was in on several big cable deals before leaving to start Quadrangle in 2000. Quadrangle advised Comcast Corp. on its purchase of AT&T Broadband and is an investor in Cablevision Systems Corp.

Sources said Quadrangle would serve as the lead banker in an Adelphia sale, dealing directly with potential bidders. UBS would handle most of the logistics.

Adelphia, with 5.4 million subscribers, could attract $17 billion to $20 billion in a sale

Several large MSOs are expected to make bids for Adelphia, including Comcast, Time Warner Cable, and Cox Communications Inc.

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