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http://www.nypost.com/seven/0103200...t_business_peter_lauria_and_zachery_kouwe.htm

INTERCONNECT
MALONE LOOKING OVER DOLANS' RAINBOW MEDIA
By PETER LAURIA and ZACHERY KOUWE
CABLE BUYS: Liberty Media's John Malone (above) may be the new owner of the Dolans' Rainbow Media - home to cable TV channels WE, AMC and IFC.
January 3, 2007 -- Media maverick John Malone is reaching out to Cablevision's controlling Dolan family to gauge the family's interest in selling Rainbow Media, the unit that manages cable networks AMC, IFC and WE: Women's Entertainment, according to sources familiar with the matter.

While these people characterized the talks between Malone's Liberty Media and the Dolans as informal chatter between friendly moguls, they could easily become more serious as Cablevision's shareholders grow increasingly restless with the company's three-month silence regarding a decision on the family's $19.2 billion buyout proposal, sources said.

"Look, they have already done most of the analysis," said one shareholder, referring to a previous buyout proposal made by the Dolans in 2005. "All they have to do is plug in the new price and figure out what the company's fair value is."

Frustration over the foot-dragging has been compounded by the fact that two other companies, Clear Channel Communications and EMI Group, have already acted on offers to take them private that came well after the Dolans made their bid for Cablevision. Clear Channel agreed to a sale. EMI quickly said a takeover offer didn't reflect the company's full value.

Cablevision, meanwhile, has yet to act. The company set up a special committee, made up of board members Thomas Reifenheiser and John Ryan, but it has yet to publicly approve or reject the Dolans' offer and is unaware of a potential deal with Liberty, sources close to the committee said.

That suggests that any Rainbow talks haven't reached the point of Cablevision sharing confidential financial data, at which time the special committee would need to be notified.

Even so, it is widely believed that the Dolans will have to raise their $27 per-share offer to at least $30 in order to get a deal done. Cablevision's shares closed trading Friday at $28.48.

If the Dolans were to sweeten their bid, they'd either have to take on more debt or raise additional cash. Bear Stearns and Merrill Lynch have agreed to provide up to $10.9 billion in debt financing, but Cablevision's existing lenders have capped the amount of debt the company can take on. Bear and Merrill recently extended the deadline for the Dolans to accept their funding commitments - already twice delayed - to Jan. 12. Enter Malone.

Representatives for Liberty, Cablevision and the Dolan family all declined comment for this story.

A deal for Rainbow's programming assets, which also include about 20 high-definition genre cable networks and a smattering of regional sports channels, could easily generate north of $2 billion.

For Malone, Rainbow's programming assets would solidify the foundation he now has with DirecTV, which last month he agreed to acquire as part of an asset exchange with News Corp., which publishes The Post.

"Now that he has DirecTV, Malone needs to build some synergies," said The Carmel Group's Jimmy Schaeffler. "QVC and Starz/Encore are good beginnings, but it sure would help if he had control of other content assets as well."