Cablevision's Dolans Withdraw Offer for the Company (Update2)

[Sean Mota]

Cablevision's Dolans Withdraw Offer for the Company (Update2)
Oct. 25 (Bloomberg) -- Cablevision Systems Corp.'s controlling Dolan family withdrew a $7.9 billion offer to take the company private after failing to reach an accord with directors during four months of talks. The shares tumbled 15 percent.

The family, led by Cablevision Chairman Charles Dolan and his son, Chief Executive Officer James Dolan, said in a statement today that the board should instead declare a $3 billion special dividend. Bethpage, New York-based Cablevision, the largest cable-television provider in New York, said in a separate statement that the board is considering the plan.

``It has become clear that we will be unable to reach agreement,'' the Dolans said.

Shares of Cablevision, which also owns the New York Knicks basketball team, Radio City Music Hall and Madison Square Garden, have tumbled 13 percent since the Dolans' made the offer on June 20. The bid, described as too low by analysts, pitted the family, which controls 71 percent of the votes, against the board.

The Dolans' bid, which the family valued at $33.50 a share including $21 in cash, was about $2 to $3 a share short of the company's value, according to analysts including Richard Greenfield at Fulcrum Global Partners and Philip Remek at Guzman & Co. A committee of Cablevision directors had been considering the offer.

Cablevision dropped $4.05 to $23.75 in early trading on the New York Stock Exchange. The company's 7.625 percent notes due 2011 traded at 98.75 cents on the dollar yesterday, down from 105.5 cents the day before the Dolans announced their plans. The bonds fell 5.25 cents on the day of the offer, according to Trace, the NASD's price reporting system.

Source

[mdonnelly]

Just goes to show that stacking the board with your cronies doesn't always work out.