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Debt-sensitive Adelphia Communications Corp. appears to be backing out of a planned $750 million acquisition of a Maryland cable operator, filing a lawsuit that could result in the deal's termination.
Back in June, Adelphia announced its planned purchase of systems with about 155,000 subscribers - including 115,000 customers from Fredrick, Md.-- based GS Communications Inc. - for $836 million in cash.
Although Adelphia didn't break out the GS numbers, UBS Warburg high-yield cable analyst Aryeh Bourkoff estimated the purchase price for the GS systems at about $750 million.
The deal raised some eyebrows because of its high valuation - about $6,500 per subscriber - but analysts that justified the price cited GS' well-upgraded plant and its proximity to wealthy residents.
GS' largest system, in Fredrick, is located in the Maryland biotechnology corridor and boasts an average annual income that's higher than the national average,...