Dolans make 'best and final' Cablevision bid

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NEW YORK - In what they called their "best and final" offer, the Dolan family that controls Cablevision Systems has further sweetened a bid to take the cable company private to $8.9 billion, chairman Charles and son and CEO James Dolan said in a statement Friday.

Pushing for a decision after months of uncertainty, they said the offer expires on Wednesday.

In October, the Dolans had submitted a $27 per share, or $7.9 billion, bid.

The latest proposal offers investors $30 per Cablevision share all in cash. It comes after various Wall Street observers predicted the Dolan clan would have to raise the value of the buyout proposal to win approval from a special committee of the company's board, which has to greenlight such a transaction.

Cablevision shares fell in early trading Friday. At around 11:15am ET, they were down 2.5% at $28.86.

Street reactions to Friday's news varied though, with some analysts saying the Dolan bid is still not high enough, while others suggested Cablevision's special committee may have signalled it could approve a $30-a-share transaction.

"We place a high probability of acceptance of this new offer," Miller Tabak + Co analyst David Joyce said.

But Pali Research's Richard Greenfield said "we believe the special committee will reject the Dolan offer next week" and warned investors to "not let Chuck and Jim Dolan steal Cablevision."

In a letter to the special committee, the Dolans said their proposal values the total equity of Cablevision at approximately $8.9 billion and implies an enterprise value of approximately $20.1 billion, up from the $19.2 billion under their previous offer.

The bid price means a 25.4% premium to the closing price of Cablevision shares on Oct. 6, the day before the previous offer. It also amounts to an 11.1% premium over the $27 per share price tag of that previous proposal. However, it means only a 1.4% premium over Thursday's closing price of Cablevision shares at $29.60.

"The premiums compare very favorably to those provided in recent going-private transactions in the cable sector," such as deals involving Cox Communications and Insight Communications, the Dolans argued, adding they are now offering a value per subscriber of approximately $4,750.

However, Greenfield has argued a buyout offer would have to be worth at least $31-$32 a share and pointed out that Cablevision shares have underperformed their cable peers since the previous takeout offer.

"We continue to believe that Cablevision deserves a valuation premium to its industry peers based on its stronger earnings growth, more valuable underlying systems (demographic driven) and a strong likelihood of a Time Warner Cable takeover attempt over the next 12-18 months," he said in a note.

Still, the Dolans argued they believe their final bid is fair and should be accepted.

"We believe our increased offer, which follows our discussions with the Special Committee and reflects our desire to complete this transaction in a timely manner, represents fair value and is in the best interests of the company and its public stockholders," they said.

The Dolans failed with a going-private bid for Cablevision's cable systems in 2005. Their proposal back then also included a spinoff of the firm's other assets, such as Madison Square Garden, sports teams and the Rainbow Media cable networks arm. However, many on Wall Street found that plan was too complex and didn't offer enough value to shareholders.
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