Financing may slow for CKX, Cablevision

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Cable operator Cablevision Systems and Robert Sillerman's CKX Inc. look to be the latest industry players to feel ripple effects of the global credit market crunch.

Bear Stearns analyst Christopher Ensley said Wednesday that investors worry that the debt market sluggishness will foil financing plans for CKX's buyout in explaining recent weakness in shares of the company, which owns the rights to such cultural icons as "American Idol," Elvis Presley, Muhammad Ali and David Beckham.

"With CKX trading at a 20% discount to its takeout price, we believe the market is placing a low probability on CKX receiving financing commitments by late September to go private," he wrote.

When CKX announced its privatization plans in early June, the stock set 52-week highs and went as high as $15.34. However, it has fallen since then and closed down 1% on Wednesday at $11.11.

Meanwhile, Cablevision said in a regulatory filing this week that it might change the financing structure behind a planned buyout by the Dolan clan. The deal that would take the firm private was in its original structure based on debt financing.

However, Cablevision said, "If current unsettled conditions in the credit markets persist, the interest costs and transaction fees of the debt may be significantly higher than Cablevision's current borrowing costs and higher than the costs related to such debt that were anticipated at the time the merger agreement was entered into."
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