Adelphia: Cablevision vs Time Warner
 

Ok. KKR is rarely dumb in the investments they make (leave RJR out of this!). Can someone explain the logic behind the KKR/Providence/Cablevison bid for Adelphia?

Ok this does not make sense...

"But Dolan may be interested in Adelphia in part because he has been outmaneuvered by his larger cable rivals. For instance, by striking a joint venture last year with Chicago's four major professional sports teams, Comcast — the largest cable carrier in that city — decimated the value of Cablevision's local sports network, which previously aired the teams' games."

If you consider...

"It would be unlikely that the private equity partners would allow the Dolans to have the type of super-voting power they currently have," said Richard Greenfield, an analyst at Fulcrum Global Partners.

What's more, although an acquisition of Adelphia would triple Cablevision's size, analysts said the combined companies would continue to lack the leverage needed to extract programming discounts or protect its entertainment assets.

Analysts also doubt that Cablevision and its financial partners could outbid Time Warner and Comcast because Cablevision would enjoy far fewer cost savings from a marriage with Adelphia. Unlike Time Warner and Comcast, Cablevision has fewer systems that are contiguous with Adelphia's, reducing the possible operating efficiencies from a union."

What is KKR thinking? Why does the deal even make sense to them?

Good question. I myself don't understand it. Maybe the Doh!lans aren't as dumb as they appear to be in public.