Dolans’ Bid Rejected by Cablevision Systems Shareholders

Large Shareholders Felt $36.26-per-Share Bid Undervalued Company

By Jon Hemingway -- Broadcasting & Cable, 10/24/2007 11:57:00 AM

Cablevision Systems shareholders rejected the bid by chairman Charles Dolan and his son, CEO James Dolan, to take the company private. The company said preliminary results showed that the proposed offer did not get the sufficient number of votes to be approved.

The Dolans were trying to take Cablevision private through a buyout of all outstanding stock at an offer price of $36.26 per share. However, the bid was meeting heavy resistance from some of the company’s largest shareholders, who felt that the deal undervalued the company.

Those that that publicly came out against the deal ahead of the vote included Legg Mason’s ClearBridge Advisors, which owns 13.8% of the shares; fund manager Mario Gabelli, who owns 8.3%; T. Rowe Price, which owns 5.7%; and Marathon Asset Management, which owns 5.3%.

"While we are disappointed that shareholders did not approve the transaction, there is really nothing negative about today's outcome. In fact, in many ways, it is a very positive event,” Charles and James Dolan said on behalf of the Dolan Family Group in a prepared statement. “We see today's outcome as a vote of confidence in the prospects of Cablevision, its management team, its 20,000 employees and the industry's future.” Cablevision has become a dynamic industry leader during the past 35 years, and we are ready to continue as a public company. We are extremely proud of all of our outstanding employees who have maintained their focus on the business. We look forward to continuing our work together to serve our customers, to build on Cablevision's success and to create value for our shareholders."

For now, it appears that the vote closes the book on the Dolans’ long-held desire to take the company private. The latest offer was the fourth bid launched by the Dolan Family Group in a process that has lasted over two years. In June 2005, the Dolans offered to take the cable and telecommunications business private at $21 per share, but it was rejected. The next attempt came in October 2006, when the Dolans offered $27 per share for the company but revised the offer to $30 in January of this year and then again to $36.26 in May.