Century Hires Investment Banker, Considers Selling

Seeking to tap the sky-high values of cable properties, Century Communications Corp. said Tuesday it is considering selling the company, which serves more than 800,000 customers in Los Angeles and Orange counties and 800,000 elsewhere in the U.S.

Century, the nation’s eighth-largest cable operator, which is based in New Canaan, Conn., hired investment banker Donaldson, Lufkin & Jenrette Inc. and is expected to decide whether to sell the company or remain independent by mid-February.

Analysts believe the company could fetch as much as $36 a share, for a total price of about more than $3 billion, not counting Century’s debt. Century shares closed up $3.12 on Tuesday, at $29 a share, on Nasdaq.

Noting that heady prices and a flurry of consolidation has allowed most cable sales to be done without investment bankers, sources speculated that Century is trying to smoke out suitors after failing to strike a deal with computer billionaire Paul Allen late this summer. Allen made a generous offer to buy the company, hoping to establish a beachhead in Los Angeles, where he serves 300,000 customers through two previous acquisitions, but the talks broke down as 70-year-old cable pioneer Leonard Tow, who controls Century, held out for a higher price.

Cable executives say Allen may be Tow’s best hope, although AT&T; could also be interested once it completes its acquisition of cable giant Tele-Communications Inc. in late February or March.

TCI owns 25% of a partnership controlled by Century that serves the 800,000 subscribers in the Los Angeles area.

For AT&T;, which plans to offer local phone service using cable wires, buying Century would provide a foothold in the nation’s second-largest city, providing access to homes in Beverly Hills, Santa Monica, Pacific Palisades, Manhattan Beach, Redondo Beach and Anaheim, among other neighborhoods.

Next week, AT&T; is expected to announce a partnership with Time Warner to deliver local phone service using the entertainment giant’s cable wires. Through Time Warner and TCI, AT&T; would have access to more than a third of the nation’s households.

AT&T; is trying to strike similar joint ventures with other cable operators to offer the first national local phone service.

Gallagher said the company was considering a sale because of the deep pockets and large customer base needed to compete as the industry rolls out advanced services such as telephone, high-speed access to the Internet and digital television..

AT&T;’s purchase of TCI is forcing many small and medium-sized cable operators to rethink their positions, with analysts predicting a future where four companies--AT&T;, Time Warner, Comcast and Paul Allen’s Vulcan Ventures--will control the cable landscape.