Cablevision Systems Corp. may be preparing to enter the bidding war for one of the cable TV industry's last remaining prizes: Adelphia Communications Corp., the largest cable TV provider in Southern California.
Two leading U.S. investment firms have asked New York-based Cablevision to join them and help sweeten their all-cash offer of about $15 billion for Adelphia, sources said Tuesday.
The investment firms, Kohlberg Kravis Roberts & Co. and Providence Equity Partners, are trying to top a joint bid of about $17.6 billion submitted by Time Warner Inc. and Comcast Corp., the nation's two leading cable TV providers.
With Cablevision's 3 million subscribers in New York and the company's vaunted management team, led by President Tom Rutledge, KKR and Providence may be able to top the bid by Time Warner and Comcast, analysts said.
"We view the news as a negative for Time Warner and Comcast," said Jessica Reif Cohen, an analyst at Merrill Lynch, who said a potential bidding war could also delay the outcome of the Adelphia auction until April.
After receiving bids in late January, Adelphia had indicated it would pick a winner by Thursday.
Neither Cablevision, KKR nor Providence would comment on the talks, first reported in the New York Times.
Some analysts speculated Tuesday that Cablevision's 79-year-old founder, Charles Dolan, might be poised to sell his controlling stake in the cable company as part of an Adelphia deal with KKR and Providence. That would allow him to keep afloat his pet project, a fledgling satellite TV venture called Voom.
Cablevision's shares fell $1.65, or 5.7%, on Tuesday, closing at $27.35 on the New York Stock Exchange.
The shares had been trading near a 52-week peak on speculation that the company would be sold or that Voom would be shut down.
Dolan also may be contemplating an expansion of his cable systems as a way to remain relevant as consolidation has left Cablevision overshadowed by bigger competitors.
In recent years, Dolan has sold off all but his New York cable systems to concentrate on his entertainment assets, which include Madison Square Garden, the New York Knickerbockers basketball and Rangers hockey teams, regional sports networks and channels such as American Movie Classics.
