New York – The Dolan family is again trying to take its company private, offering to buy out public shareholders of Cablevision Systems Corp. in a deal that values the cable television operator at $7.9 billion plus the assumption of $11.3 billion in debt.
A separate bid from the Dolans last year ran into objections from the board, but this time the Dolans say they’re making a simpler offer that should be more likely to succeed.
Under the terms of the new offer, which the Dolans detailed in a letter to the Cablevision board Sunday, the family would offer public shareholders $27 per share in cash, a 12.8 percent premium to the stock’s closing value on Friday.
The news sent Cablevision’s shares soaring $2.57, or 10.74 percent, to close at $26.50 Monday on the New York Stock Exchange.
The Dolans said they were interested only in doing the going-private transaction, dampening hopes that the company could be put in play as an acquisition target.
They also said they would go ahead with the proposal only if it is approved by a special committee of independent directors.
The Dolans are in a position to block any potential sale to other bidders since they control 74 percent of the company’s vote through a special class of shares. They also have a 22.5 percent economic stake in Cablevision.
If the deal goes through, the current management would stay in place, including Cablevision’s founder and chairman, Charles Dolan, and his son, James Dolan, chief executive officer.
The Dolans said in a letter to the board that “succeeding in this fiercely competitive environment requires a long-term, entrepreneurial management perspective that is not constrained by the public markets’ constant focus on short-term results.”
Last time around, the Dolans’ bid to go private ran into opposition from board members, partly because of its complexity.
That deal would have resulted in the cable television business going private at the same time that a separate public company was created to hold:
Several cable networks.
Madison Square Garden.
Radio City Music Hall.
The New York Knicks basketball team and New York Rangers hockey team.
