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Judge Refuses to Issue Injunction on Cox Privatization Plan

Aug 24, 2004  •  Post A Comment

Cox Communications shareholders were dealt a setback Tuesday after a Delaware judge refused their request to block a special committee from approving a buyout offer from Cox’s majority shareholder without getting approval from other public shareholders.

At issue is a $7.9 billion offer from Cox Enterprises, which control 62 percent of Cox Communications, to take the cable operator private.

Cox Communications named a special committee to review Cox Enterprises’ offer and is free to give its nod to the deal without approval from public shareholders. However, public shareholders are crying foul and argued that they should be able to approve the deal as well.

The judge said he’d decide whether to issue an injunction blocking the privatization plan after he determines whether the special committee negotiated a fair price for the 38 percent stake in Cox Communications that public shareholders hold.

Specifically, Cox Enterprises offered $32 a share to buyout the stake it doesn’t own already, however many observers think it is likely Cox Enterprises will have to raise its offer, given that Cox Communications shares are trading at more than $33 a share.

Cox Enterprises has set a deadline of Dec. 15 to consummate a deal.