Financing may slow for CKX, Cablevision


NEW YORK -- 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 the firm's buyout in explaining recent weakness in shares of CKX, 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," Ensley 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.

Ensley said CKX shareholders should be in good shape though as the company is proceeding with its spinoff of a real estate firm that should create value and is not dependent upon CKX going private.

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

However, Cablevision, led by chairman Charles Dolan and his son and CEO James, said in its filing, "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."

The company didn't detail possible new financing structures, but reiterated that about $13.9 billion is needed overall to pull off the deal.