Cablevision Systems Corp., one of the largest cable systems operators in the United States, announced on Wednesday that it has agreed to be taken private by its founding family, the Dolans, for $10.6 billion in cash.
Cablevision said in a statement yesterday that its board of directors, on the advice of a special committee of independent directors, has voted to approve takeover bid that would reach nearly $23 billion after addition of debt.
This was not the first time the Dolan family, the company's controlling shareholders, attempted to take the company private, rather they tried to acquire the company twice before.
In their first two attempts Dolans offered to take the company private at $27 a share in cash in October, and in January they raised the offer to $30. But, both the offers were rejected as inadequate by a committee of independent directors on its board.
In their third attempt Dolan family has sweetened the offer to $36.26 per share, an 11 percent premium to the closing price of $32.67 on Tuesday and a 21 percent premium to the $30-a-share offer the family made in January.
The committee and the full board of directors have approved the Dolans' latest offer to take the company private, saying it was in the best interests of public shareholders.
Dolan Family’s latest takeover offer values the company at 22 billion dollars, the firm said in a statement.
In a statement the Dolans, led by Charles Dolan, the chairman, and his son James, the CEO, the deal to take the company private would allow them to carry on their family tradition.
“We believe the best way to continue this tradition in today’s increasingly competitive environment is as a privately held company,” said the Dolans. “This new structure and an entrepreneurial perspective will enable us to keep growing the business with our talented management team and dedicated employees.”
The Dolans currently own 22.5 percent of the Cablevision's shares and 70 percent of its voting rights, controlling company through a special class of supervoting shares. The independent directors had to express their approval on any ‘going-private’ transaction in order to ensure that public shareholders got a fair deal.
Founded in 1973, the Bethpage, New York-based cable TV provider is the 5th largest cable provider in the country, providing service to about 3.4 million subscribers, primarily in the greater New York, Boston, and Cleveland metropolitan areas.
Cablevision, which also owns Radio City Music Hall as well as Madison Square Garden and the professional teams, the Knicks of the NBA and the Rangers of the NHL that play there, faces competition for video customers from satellite broadcasters such as DirecTV Group Inc.
It also faces challenge from phone companies such as Verizon Communications Inc., which are starting to offer video services.
Cablevision's shares jumped $3.23, nearly 10 percent, to $35.90 on Wednesday.