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Comcast to buy Lenfest
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November 16, 1999: 3:13 p.m. ET
$6.9B acquisition would add 1.25M subscribers in Philadelphia area
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NEW YORK (CNNfn) - Comcast Corp., the nation's third largest cable television company, on Tuesday said it agreed to acquire rival cable operator Lenfest Communications Inc. (LCI) for $6.9 billion in stock and assumed debt.
Owned by AT&T (T) and the Lenfest family, LCI, the nation's ninth largest cable TV company, would give Philadelphia-based Comcast (CMCSK) an additional 1.25 million subscribers in the metropolitan Philadelphia area and solidify its position in the East Coast marketplace.
"With the addition of LCI to Comcast, we will serve over 4 million customers in the mid-Atlantic region, stretching from New Jersey to suburban Washington, D.C.," said Brian Roberts, president of Comcast. "The end result will be the largest and most concentrated broadband operation in the country."
In a separate deal, Comcast said it will trade two cable systems it owns in Florida with a combined subscriber base of 133,000 for three Time Warner (TWX) systems in Indiana totaling 120,000 subscribers. With the trade, Comcast will have more than 390,000 subscribers in Indiana and Time Warner will have more than 1.5 million in Florida. Time Warner is the parent company of CNNfn and the nation's second largest cable operator.
Terms of the LCI acquisition call for Comcast to issue 116 million shares to LCI shareholders of Comcast Class A common stock, which rose $2.87½ to $47.87 ½ at 4 p.m. on the Nasdaq stock market. Comcast also will assume LCI's debts and liabilities amounting to roughly $1.5 billion. Officials expect to complete the deal in the first quarter of next year.
Officials said the LCI agreement superseded a prior agreement under which AT&T was to acquire the Lenfest family's 50 percent interest in LCI, and was a result of an agreement under which Comcast dropped out of a bidding war with AT&T in May for Media One.
AT&T won with a $54 million bid to acquire MediaOne. As Comcast dropped out of the bidding, AT&T agreed to an exchange of cable systems that could let Comcast gain 2.7 million of AT&T's cable subscribers at a cost of up to $9.2 billion.
Also under that agreement, if Comcast buys LCI and AT&T's acquisition of MediaOne fails to close, AT&T would then have the opportunity to acquire cable systems totaling 1.3 million subscribers from Comcast, the companies said.
-- from staff and wire reports
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