ClearBridge Opposes Cablevision Sale

Oct 17, 2007  •  Post A Comment

The Dolan family’s $36.26 a share bid to take Cablevision Systems private is unlikely to succeed because major institutional investors say they consider the offer too low and the family says it won’t raise the offer.
ClearBridge Advisors, Mario Gabelli, T. Rowe Price and Marathon Asset Management have reportedly said they will vote against the proposal at a special meeting of shareholders scheduled for Oct. 24.
If those reports are true, “there is virtually no hope for the Dolan offer to succeed,” said Rich Greenfield, analyst at Pali Capital.
The Dolan family, which founded Cablevision, has already made several attempts to buy the shares of cable operator, and raised the price on this offer since it was originally proposed.
But on Tuesday, James Dolan, president and CEO of Cablevision, issued a statement that said:
“On behalf of my parents, brothers and sisters, I want to state emphatically that there will be no modification of the family’s accepted offer to acquire Cablevision. We are looking forward to next week’s vote and hope that the transaction is approved, but I’d underscore that I am completely prepared to continue to lead the company into the future as a public company if the transaction is not approved.”
Mr. Greenfield does not expect another bid for the company by the Dolans.
“Given the weakness in cable equities over the past several months and a financing environment that is unlikely to enable the Dolan family to offer to take CVC private again anytime soon (unlike the past couple of times Dolan offers have fallen through), we have been somewhat surprised how many large shareholders appear to be lining up against the transaction (based on public comments/statements),” Mr. Greenfield said in a report Wednesday morning.
He said that if shareholders reject the Dolan offer, he expects Cablevision share to drop to the low $30 range.
But Mr. Greenfield still recommends the stock, suggesting that 12 months to 18 months from now, it could be worth $47 a share.

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