Comcast to Add to Jones Stake in Stock Deal

PHILADELPHIA —  Comcast Corp., the No. 3 U.S. cable television company, said it will double its stake in Jones Intercable Inc. for about $840 million in stock, taking advantage of the recent decline in Jones’ share price as it bolsters its presence in the mid-Atlantic region.

In April, Comcast bought 39% of Englewood, Colo.-based Jones, which has about 1 million subscribers in 17 states.

It will swap 1.4 shares of its Class A common stock for each Jones Class A and common share, or $50.31 each. That represents a premium of about 9% to the Friday closing price of Jones Class A, and about 13% to the common shares price.

Comcast is increasing its ownership as Jones posts lower-than-expected second-quarter results, a sign that the company wants to reassure investors about its April purchase of a controlling stake.

After pending acquisitions, Philadelphia-based Comcast will be the largest cable TV company behind No. 2 Time Warner Inc., which has 12.9 million subscribers, and No. 1 AT&T; Corp., with 15.1 million.

Comcast is rolling out digital cable service aggressively, and finished the second quarter with 225,900 subscribers to it. The service is now available to more than 60% of the company’s total subscribers. Comcast added 20,800 subscribers to its ComcastHome high-speed Internet access service to finish the quarter with 94,200 such customers in 10 markets.

Separately, Comcast said it posted a second-quarter profit after it received a $1.5-billion breakup fee from its canceled purchase of MediaOne Group Inc. AT&T; agreed to swap cable systems with Comcast in exchange for Comcast dropping its MediaOne purchase agreement.

The company had pro forma profit of $816.4 million, or $1.01 a share, contrasted with a loss from continuing operations of $92 million, or 13 cents, in the year-earlier period. Revenue rose 23%, to $1.48 billion from $1.21 billion.

Cash flow--or earnings before interest, taxes, depreciation and amortization--rose 29%, to $457.3 million from $353.3 million a year earlier.

On Monday, Comcast shares fell 94 cents to close at $32 on Nasdaq. Jones Class A rose $1.06 to close at $47.19; Jones common rose $2.63 to $47.25, also on Nasdaq.