Adelphia gave cable something to whisper about at National early yesterday morning after saying it will explore the option of selling to extract itself from bankruptcy. UBS sees Time Warner up front as the most probable lead buyer, cautioning the process "could drag on until late ’04 or early ’05." Time Warner elected not to comment on its level of interest; Cox [COX] was noncommittal too. "If there are cable systems out there that will match our portfolio, we’ll take a look," a Cox rep says. UBS’ valuation of a sold-off Adelphia is approximately $20bln, or $3.8K/sub, while the reorg valuation is $17bln, or $3.3K/sub. The news of a potential sale was welcomed by investors and creditors banded under the banner of the "Official Committee of Equity Security Holders." They argue that selling the MSO’s assets will maximize recoveries in a way an independent, standalone entity could not match. Of course, none of this is a done deal, due to significant hurdles (including an SEC investigation and the messy Rigas ruckus). Adelphia says it’s just begun the sales process and is actively seeking bidders to test the market. "While we will explore the possible sale with full vigor, we also intend to continue to pursue a plan for an independent company upon emergence," chmn/CEO Bill Schleyer says. "We will compare the value created in both approaches and do what is in the best interests of our constituents." A bankruptcy hearing scheduled for Mon to determine the fate of the company’s reorg plan was postponed.

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