For Time Warner, teaming up with Comcast to acquire Adelphia Communications could be a boon on many fronts. One, it would get the big media...

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NEW YORK — For Time Warner, teaming up with Comcast to acquire Adelphia Communications could be a boon on many fronts.

One, it would get the big media player back into the acquisition game, five years after the debacle of the AOL merger. Two, it would unwind a complicated cross-ownership structure with Comcast that investors never liked. And three, it would allow the company to spin off its own cable holdings into a separate entity, facilitating other cable deals.

Most importantly, a final resolution of the deal, which has been in the works for many months, would lift another cloud of uncertainty hanging over Time Warner, just weeks after it resolved a two-year federal investigation into AOL’s accounting practices.

The Wall Street Journal and The New York Times both reported yesterday that Time Warner and Comcast have reached a tentative agreement to pay about $18 billion in cash and stock for Adelphia.

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A final resolution could be several weeks away, however, as the details still have to be approved in bankruptcy court. Spokeswomen for Adelphia, Comcast and Time Warner all declined to comment.

Investors relieved

Investors were clearly relieved. The company’s shares rose 9 cents to close at $17.97 yesterday despite an overall decline in most media stocks.

In a note to investors, Sanford C. Bernstein analysts Craig Moffett and Michael Nathanson said investors have “fretted” over the deal. The shares have fallen about 8 percent so far in 2005.

Analysts said Comcast stood to gain considerably from the deal, which would give the Philadelphia-based cable company 2 million of Adelphia’s more than 5 million subscribers in exchange for about $2 billion in cash and Comcast’s 21 percent stake in Time Warner Cable.

Because it would be swapping assets instead of selling them, Comcast also would save about $1.2 billion in taxes, the analysts said. However, the news failed to lift Comcast’s shares, which fell 21 cents to $33.07.

The reports differed on the total dollar amounts involved. The Journal reported that Time Warner and Comcast would put up $12 billion in cash and about $5.6 billion in stock, while the Times put the figures at $13.5 billion in cash and about $4.5 billion in stock.

The bidding process got a jolt from an 11th-hour bid from Cablevision Systems, a smaller New York-area cable provider that offered $16.5 billion in cash for Adelphia, according to several news reports. Cablevision has declined to comment.

Cable holdings

A Time Warner/Comcast deal also could allow Time Warner to separate its cable holdings into a separate publicly traded company, which could have several benefits.

Investors have looked down on media-conglomerate stocks recently, preferring “pure-play” companies such as Comcast, which operates only in cable. Time Warner, despite the sale of its music company and other assets, still spans many media categories, including magazines, cable networks, book publishing and AOL.

A separation of the cable business would further streamline Time Warner’s own structure while also giving it a “currency” to use in making other transactions in cable.

Viacom, another major media conglomerate, recently announced plans to split itself in two in hopes that Wall Street will value its business higher as two entities than as one.

Cable TV has been one of the major growth areas for Time Warner as customers sign up for premium services like high-speed Internet access, digital cable, personal video recorders and telephone service carried over the Internet.

Adelphia, the nation’s fifth-largest cable-television provider, filed for bankruptcy after founder John Rigas and others were accused of looting the company and cheating investors out of billions of dollars.

Rigas and his son Timothy were convicted of conspiracy, bank fraud and securities fraud.