Laguna Firm Plans Bid on Rogers’ U.S. Cable System

A Laguna Beach-based investor group has announced that it will bid on U.S. cable holdings valued at $1 billion that were recently placed on the auction block by Rogers Communications of Toronto.

The system serves approximately 525,000 subscribers in four states, including 73,000 cable viewers in Huntington Beach, Westminster, Fountain Valley, Stanton, Garden Grove, Los Alamitos and Rossmoor.

DL Ranch Corp., a television management company headed by longtime broadcast entrepreneur Richard G. Lubic, is recruiting investors and plans to make a bid for the cable group within the next two weeks, Lubic said.

$2,000 Per Subscriber

“We have a tentative working agreement with Drexel Burnham (Lambert) to do the debt financing if we come in with our equity money,” Lubic said. “Our equity would have to be $150 million to $250 million. I don’t think we’ll have a problem raising that money.”

Drexel Burnham Lambert did not return telephone calls from The Times.

Analysts value Rogers’ U.S. cable holdings at a minimum of $2,000 per subscriber, which would place the deal at about $1.1 billion. They also said that Lubic will face stiff competition from major cable operators.

“This is not going to be a cheap deal,” said Kenneth T. Berents, a media analyst with the brokerage house of Butcher & Singer in Philadelphia. “Cable is a pre-eminent industry as far as its growth is concerned and will continue to be so.”

One media analyst, who requested anonymity, said Lubic has long-term broadcast industry ties and “a lot of equity interest in a lot of different things.” But the analyst characterized him as a small-time player compared to other companies expressing interest in the Rogers holdings, including cable giant Tele-Communications Inc. of Denver.

The investment banking firm of Morgan Stanley & Co. in New York is handling the controlled auction for Rogers. Ronald Beck, a senior associate with the company, said that “a substantial number” of investors--including DL Ranch--has expressed interest in the cable system, which has subscribers in San Antonio and Laredo, Tex., Portland, Ore., and the Minneapolis area, in addition to Orange County.

“There are a lot of current cable operators who have shown interest, as well as companies not currently affiliated with the industry,” Beck said. “We’re finding a lot of people in, say, San Antonio, interested in that part of the system. But we’re selling it as a package. The company is hoping to complete all this by the end of the year.”