Comcast to reduce interest in Time Warner Cable
Monday, September 27th 2004, 9:52 am
By: News On 6
NEW YORK (AP) _ Time Warner Inc. and Comcast Corp. on Monday said they have agreed to allow Comcast to cut its interest in Time Warner Cable Inc. to 17 percent from about 21 percent.
In exchange for the stake reduction, Comcast would receive shares of a Time Warner unit that will hold cable systems and cash.
Philadelphia-based Comcast said it has always planned to dispose of its stake in Time Warner Cable.
Comcast's option, which can be exercised between Dec. 1, 2004, and April 1, 2005, would require Time Warner to redeem a portion of the Time Warner Cable common stock held by a Comcast trust for all of the stock of a Time Warner Cable unit.
At the time of exchange, the unit will own cable systems serving about 90,000 basic subscribers and have about $750 million (euro612 million) in cash.
Comcast's trust currently owns about 21 percent of Time Warner Cable _ held through a 17.9 percent interest in Time Warner Cable and a 4.7 percent limited partnership interest in Time Warner Entertainment Company, L.P., a subsidiary of Time Warner Cable.
If Comcast exercises the option, it will reduce the trust's interest to a 13.7 percent stake in Time Warner Cable, while the interest in Time Warner Entertainment will remain at 4.7 percent.
With 2003 revenue of $18.3 billion (euro14.9 billion), Comcast is the largest cable TV operator in the United States. Stamford, Connecticut-based Time Warner Cable, with 2003 sales of $7.7 billion (euro6.28 billion), is No. 2.