Sunday, June 19, 2005

Hit #48

The Dolan family, that owns a majority stake in Cablevision (CVC), has offered to take the company private in a transaction valuing the company at $33.5/share, a 25% premium over the most recent close. This offer represents a 54% premium to my average cost of $21.01/share.

The transaction is a bit complicated, involving splitting up of the company into an entity that contains its core cable assets, which would be taken private at $21/share and a spinoff containing other assets, like NY Knicks, NY Rangers, Madison Square Gardens and a few cable channels, with each Cablevision share entitled to $12.5 worth of shares in this new company.

The price is fair, though someone like Time Warner would likely pay more for the cable part of the company. With the family owning majority voting rights, it is unlikely this deal will fail. With enough shareholder noise, this offer may be sweetened, but that is about it.

This is the 3rd cable company that is going private in less than a year - Cox (check out hit #21) and Insight (see hit #34) were bought out earlier. At this rate Mediacom (MCCC) won't remain independent much longer.

Previous hit - Wyndham (#47)


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