Classic Eyes Sub Sales2/11/2001 7:00 PM Eastern
Classic Communications Inc., the Austin, Texas-based MSO serving midsized markets, is looking to shed some systems with roughly 50,000 to 100,000 subscribers.
Classic-which has about 404,000 customers in 10 states-has hired Waller Capital Corp. to look for a buyer.
Selling the systems could be tough, as other properties in similar secondary markets are also on the block. Since December, AT&T Broadband has placed about 1.2 million subscribers in Wyoming, Nevada, Montana and Iowa up for sale. Adelphia Communications Corp. also is weighing the disposition of about 500,000 subscribers in nonstrategic markets.
Classic's subscribers are spread out over 600 separate systems, some with as few as 300 subscribers per headend. Other midmarket operators, like Mediacom Communications Corp., strive to pack as many as 30,000 to 40,000 subscribers on a single headend, so that number appears to be exceedingly low.
Sources said Classic hopes to wrap up a deal in two to three months. Prices for the systems could vary greatly, sources said, ranging from under $2,000 per subscriber for smaller markets to more than $4,000 per customer for larger systems like a 5,000-subscriber one in Breckenridge, Colo.
At $2,000 per subscriber, the systems would bring in between $100 million and $200 million. Classic will likely use any proceeds from a sale to help pay down debt.
This is the second asset sale plan for Classic in about five months. Back in September, the company said it would put its 350 communications towers up for sale, hoping to raise about $70 million.