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Cox to sell Middle America Markets to Cebridge Connections
by ibmkillr 11:17AM Tuesday Nov 01 2005
»today.reuters.com/investing/fina ··· COX.XML

NEW YORK, Nov 1 (Reuters) - A private-equity group led by cable entrepreneur Jerry Kent is set to purchase a group of cable systems from Cox Communications Inc. for $2.5 billion to $3 billion, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Kent's company, Cebridge Connections Inc., and its financial backers, Goldman Sachs Group Inc.'s (GS.N: Quote, Profile, Research) private-equity arm and Oaktree Capital Management LLC, will buy systems serving about 900,000 subscribers in eight states, the paper said.

Last-minute details of the deal were being worked out last night and it was still possible it could hit a snag, these people warned.

Cox, taken private last year by its largest shareholder, Cox Enterprises, decided at that time to sell the systems to finance the $8.5 billion transaction. Cox considered the systems as non-core assets because they are spread out and not attached to their densely clustered systems in regions such as San Diego and Northern Virginia, the paper said.

For Kent, the deal marks a major step in his development of a second cable empire. In the 1970s and 1980s he was one of the pioneers of the cable industry and he sold his company, Charter Communications Inc., in the late 1990s to Microsoft Corp. (MSFT.O: Quote, Profile, Research) co-founder Paul Allen. Kent stayed on as Charter's chief executive until the fall of 2001.

Kent then formed Cequel III, a management company that runs Cebridge, which he also founded, and a wireless tower company. Cebridge has about 400,000 subscribers in the south and central United States, so the Cox deal will more than triple its size.

The Cox systems were attractive to Cebridge because many are located in more densely populated areas than Cebridge's mostly rural systems.

The price per cable subscriber Cebridge is paying Cox is in the high $2,000 range, according to a person familiar with the transaction, the paper said.