Adelphia Deal’s Terms Finalized

Time Warner Inc. and Comcast Corp. have finalized terms of a deal to buy cable operator Adelphia Communications Corp. for $17.6 billion in cash and stock, people familiar with the transaction said Wednesday.

If approved by Adelphia’s Bankruptcy Court judge, regulators and shareholders, the deal will give Time Warner control of the lucrative Los Angeles market and vault it above satellite TV operator DirecTV Group Inc. as the second-largest U.S. pay-TV company, behind Comcast.

The joint bidders have agreed to pay $12.7 billion in cash and the rest in stock in a newly created cable venture. Comcast’s net cash contribution would be $1.5 billion.

As part of the transaction, Comcast would receive 1.8 million subscribers in exchange for its 21% stake in Time Warner Cable.

A rival bidder, Cablevision Systems Corp., has offered $17.1 billion in cash for Adelphia. Adelphia would have to pay a breakup fee equal to 2.5% of the purchase price to get out of its agreement with Time Warner and Comcast, however.