Cablevision Board Appoints Panel to Review Bid

Oct 9, 2006  •  Post A Comment

Cablevision’s board appointed a special committee to evaluate a $7.9 billion bid by the company’s founding Dolan family to take the cable operator private.

The transaction committee, which consists of board member Thomas Reifenheiser and retired Navy Vice Admiral John Ryan, hired Willkie Farr & Gallagher as legal counsel and plans to retain financial advisors to assist in a review of the proposal.

The committee will review the Dolan’s $29 per share offer in a deliberate and timely manner, with no assurance that any agreement will result, the company said Monday. In October 2005, the board rebuffed a $21 per share offer from the family, which is led by Chairman Charles Dolan and his son, CEO James Dolan. The family said their latest attempt to take the company private is a reaction to cable-market realities.

“Responding to the intensifying competition in our industry and the risk of new entrants will require a long-term, entrepreneurial management perspective that is not constrained by the constant focus on short-term results demanded by the public equity markets,” the Dolans said in a letter to the board.

Cablevision in its Monday statement said it had no further comment on the proposal.

Mr. Reifenheiser has been a Cablevision director since 2002. He retired in 2000 as a managing director of JP Morgan Chase, where he oversaw its global media and telecommunications unit. He is also a director of Mediacom Communications.

Mr. Ryan is president of the State University of New York Maritime College and serves as acting chancellor of the State University of New York. Previously he was superintendent of the U.S. Naval Academy. He’s been a Cablevision director since 2002, the same year in which he retired from the Navy.

Cablevision shares finished trading at $26.42, up 10.74 percent following word of the bid.

The Dolans’ control of Cablevision has enabled them at times to run the company more like a family business than a public company.

In March 2005, Charles Dolan and his son disagreed over whether or not to continue the company’s Voom high-definition satellite-TV business. When the Cablevision board wanted to close it down, Mr. Dolan tried to buy it from the company. He was unable to raise the funds.

More recently, the company said it would restate earnings after discovering that it had granted stock options to a vice chairman after he died but reported them as being issued while he was alive.

Cablevision’s strength derives from its location and financial performance, serving more than 3 million customers in New York’s affluent suburbs and generating among the highest revenue per subscriber among cable operators.

If the Dolans ever decide to sell, they’d potentially find a willing buyer in Time Warner, which owns the systems in most of the rest of the New York market. Time Warner CEO Richard Parsons has said his company would consider a purchase if Cablevision went on the market.