AOL Time Warner is scouring the market for potential cable acquisitions, after dissolving its long-running partnership with AT&T. The struggling media giant, which had been considered too heavily indebted to make acquisitions, has outlined plans for a new cable unit, to be called Time Warner Cable Inc, which will sell shares to the public as early as 2003. The company, which will be the number two cable group in the nation with 10.8 million subscribers, could be valued at as much as $25 billion.

Dick Parsons, AOL Time Warner chief executive, said that the new cable company would give AOL Time Warner more flexibility, but declined to name target companies. However, Time Warner has long eyed Cablevision, a cable provider to markets in New York and elsewhere.