CFO: Time Warner Interested in Adelphia

NEW YORK (AP) _ Time Warner Inc. is interested in a potential acquisition of Adelphia Communications Corp. but hasn't yet seen the beleaguered cable company's books, Time Warner chief financial

Thursday, September 9th 2004, 10:36 am

By: News On 6

NEW YORK (AP) _ Time Warner Inc. is interested in a potential acquisition of Adelphia Communications Corp. but hasn't yet seen the beleaguered cable company's books, Time Warner chief financial officer Wayne Pace said Thursday.

``We've done no due diligence on Adelphia,'' Pace told investors Thursday at Morgan Stanley's 9th Annual Media & Communications Conference. ``We will take a very hard look at Adelphia when the materials are available.''

The auction of Adelphia, which put itself on the block in April as part of a plan to emerge from bankruptcy in the wake of an accounting scandal, is expected to be a lengthy process.

Pace said an ongoing Securities and Exchange Commission investigation into certain accounting practices at Time Warner's America Online unit would make it difficult to issue stock from any of its units for a potential acquisition.

He added, however, that Time Warner has other ways of sealing large deals, such as through a reverse merger. Time Warner, for instance, could give up equity in its cable unit to shareholders in the target company, he said.

Pace declined to comment on Time Warner's talks to acquire movie studio Metro-Goldwyn-Mayer Inc., which has an extensive film library.

Generally, Time Warner likes all of the businesses it is in and would consider acquisitions for each of its business units, Pace said.

New York-based Time Warner, with 2003 revenue of $38 billion, is the world's leading media company.

Adelphia, based in Greenwood Village, Colo., is the nation's fifth largest cable television provider. The Rigas family, which founded the company, was forced to give up control of Adelphia in 2002, the same year it filed for Chapter 11 bankruptcy protection.

John Rigas, Adelphia's founder, and his son Timothy were convicted of conspiracy and fraud charges earlier this year for allegedly looting the company and cheating investors out of billions of dollars.

Philadelphia-based Comcast Corp., the nation's largest cable television firm, is also interested in Adelphia. On Wednesday, Comcast chief financial officer John Alchin said his company doesn't need to get any bigger and can afford to be picky when it comes to buying any Adelphia assets.

Analysts and creditors have put Adelphia's value between $17 billion and $23 billion.