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Cablevision Shares Surge on Privatization News

Jun 20, 2005  •  Post A Comment

Shares in Cablevision Systems surged 19 percent Monday on news that the company’s founding Dolan family has presented a proposal to take the company private in a $7.9 billion deal.

The company’s stock price closed at $32 a share Monday, up $5.13 from Friday’s close.

Under the proposal that the Dolans made to the Cablevision board Sunday, the family, which owns 20 percent of the company’s stock but through certain rights has 71 percent voting control, will pay an estimated $33.50 a share, or a total of $7.9 billion, for all outstanding Cablevision shares. The price represents a 25 percent premium over last Friday’s closing stock price.

The company’s cable and telecom assets would make up the new Cablevision, which would have Charles Dolan as chairman and Tom Rutledge as CEO. Mr. Rutledge is presently chief operating officer of Cablevision. The remaining assets would become part of a publicly traded company to be known as Rainbow Media Holdings, which would be led by James Dolan as CEO.