Monday, March 07, 2005

Cox considers sale of 900,000 customers

Off the AP wire: Cox is looking to sell off almost a million customers, including much of the Middle America Division of which Lafayette is a part . . . but not our system. What's wrong? Aren't we ungrateful enough? Oh well.
Cox Communications Inc. said Monday that it is exploring a sale of four cable operations serving about 900,000 subscribers in Texas, North Carolina, California and several other states.

Systems under consideration for sale include West Texas, serving the Lubbock, Midland, Amarillo, San Angelo and Abilene areas; North Carolina, serving the Greenville, Rocky Mount, New Bern and Kinston areas; Humboldt County, Calif.; and much of Middle America Cox.

MAC is primarily comprised of operations in Texas, Louisiana and Arkansas and also includes certain systems in Oklahoma, Mississippi and Missouri. Excluded from the potential sale are some operations serving the northwest Arkansas and Lafayette, Louisiana areas.

[emphases mine]
I don't have an interpretation on this one. As far as I can tell Cox is inviting offers. No press release is posted to the Cox site yet. I'm sure the story will mature. Ideas?

Update 9:20 pm, 3/8/05: I've been trolling around looking for discussion of this pretty dramatic move and so far as I hear most folks think that what is happening is that Cox is trying to shed at least some of the huge debt it took on in taking itself private. Selling of in the neighborhood of a sixth of your customer base is pretty radical stuff--especially since you are having to sell at an effective loss: the price paid shareholders to take the company private was predicated on an amount per customer but the customers they are considering getting rid of are rural and worth less than on the market than the price they just paid for them. They are moving toward focusing on densely populated "rich pickings" markets and giving up rural and small urban markets. (Last week they wanted to be regarded as loyal corporate citizens of Alexandrian and Lake Charles. This week....? Oh well, not rich enough.) They would be keeping New Orleans, Baton Rouge and Lafayette. Too bad we made the cut. But it's possible they thought they couldn't get the price the want for Lafayette right now. "Uncertainty in the market."

The most informative single article is from Channel 5 in Alex.

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