LI-based Cablevision Systems still targeting Adelphia buy

Cablevision Systems' new $17.1 billion bid for Adelphia Communications indicates that the Long Island company wants to remain independent and grow through acquisitions, an analyst said.

If Cablevision fails to snatch Adelphia from a rival alliance of Comcast and Time Warner, Cablevision is likely to be acquired in a year or so, said telecom analyst Jeff Kagan.

Just when we thought the deal was done and Adelphia was going to be acquired by Comcast and Time Warner, Cablevision ups their bid so the company is still in play, Kagan said in an e-mail.

The Wall Street Journal and Reuters quoted unnamed sources in saying that Cablevision had increased its bid for Adelphia, the country's fifth-largest cable operator, from $16.5 billion to $17.1 billion. Time Warner and Comcast are reportedly bidding $17.6 billion. But Cablevision is reportedly offering an all-cash deal, while the Time Warner-Comcast offer is a mix of cash and stock.

But Cablevision could face an uphill battle because the journal reported that U.S. Bankruptcy Court Judge Robert Gerber is expected to approve a $440 million breakup fee that Adelphia would pay to Time Warner and Comcast if their bid ultimately is rejected.

The breakup fee creates a complication for Cablevision because Adelphia's creditors would have to be compensated for the additional money they pay to Time Warner and Comcast.