ensure the company has the flexibility to meet the challenges of intensifying competition
The Dolan family, which controls Cablevision Systems Corp. (CVC.N), on Monday said it offered to buy the remaining shares it does not already own in a deal that values the company at $7.9 billion, sending its shares up almost 12 percent.
Shareholders would receive $27 per share in cash, under the terms of the deal proposed in a Sunday letter to the board of directors, according to a statement issued by the family, which said it was not aiming to sell Cablevision.
The deal, which follows a thwarted effort by the Dolans to buy out the company last year, implies an enterprise value of $19.2 billion, which includes debt for Cablevision.
In the letter to the board the Dolans said they believed that going private would "ensure the company has the flexibility to meet the challenges of intensifying competition and the risk of new entrants in years to come."
Cable operators face increasing competition from telephone companies such as Verizon Communications (VZ.N) and AT&T Inc (T.N), which develop rival video services for consumers.
In 2005 the Dolans offered $33.50 per share in a deal that valued Cablevision's cable assets at $21 a share and proposed a $12.50 per share spin-off of the company's other assets such as the Madison Square Garden sports arena, a spokesman said.
The latest offer price represents a 17 percent premium to the average closing price over the past two weeks and is 14.9 percent higher than a 2005 proposal to go private when adjusted for a $10 dividend paid in April, according to the statement.
Cablevision shares rose 11.8 percent in early trade to $26.75 from their Friday close of $23.93 on the New York Stock Exchange.
The family said the latest offer, a simpler structure than the 2005 offer, took into account feedback it received from the special committee that reviewed the earlier proposal.
It said it anticipates that the board will form a special committee of directors to respond to this proposal and that it would not pursue the deal without special committee approval.
The Dolans said they expect the cable company's senior management team to stay in place with Charles Dolan as chairman and James Dolan as president and chief executive.
They said they expect to continue to run the business substantially in accordance with current practices and keep its employee base, "with changes as necessary to meet competitive challenges."
The family said it would finance the deal in part by investing all its shares in the company, which would have a value of about $1.7 billion based on the offer price.
The total funds needed for the deal are expected to be about $10.9 billion, including refinancing of existing credit facilities, according to the Dolan family, which said it received a commitment letter from Merrill Lynch & Co and Bear Stearns & Co. for debt financing necessary for the deal.
Merrill and Bear Stearns also acted as financial advisors to the Dolans. Law firms Debevoise & Plimpton LLP and Skadden, Arps, Slate, Meagher & Flom LLP were its legal advisors.
Shareholders would receive $27 per share in cash, under the terms of the deal proposed in a Sunday letter to the board of directors, according to a statement issued by the family, which said it was not aiming to sell Cablevision.
The deal, which follows a thwarted effort by the Dolans to buy out the company last year, implies an enterprise value of $19.2 billion, which includes debt for Cablevision.
In the letter to the board the Dolans said they believed that going private would "ensure the company has the flexibility to meet the challenges of intensifying competition and the risk of new entrants in years to come."
Cable operators face increasing competition from telephone companies such as Verizon Communications (VZ.N) and AT&T Inc (T.N), which develop rival video services for consumers.
In 2005 the Dolans offered $33.50 per share in a deal that valued Cablevision's cable assets at $21 a share and proposed a $12.50 per share spin-off of the company's other assets such as the Madison Square Garden sports arena, a spokesman said.
The latest offer price represents a 17 percent premium to the average closing price over the past two weeks and is 14.9 percent higher than a 2005 proposal to go private when adjusted for a $10 dividend paid in April, according to the statement.
Cablevision shares rose 11.8 percent in early trade to $26.75 from their Friday close of $23.93 on the New York Stock Exchange.
The family said the latest offer, a simpler structure than the 2005 offer, took into account feedback it received from the special committee that reviewed the earlier proposal.
It said it anticipates that the board will form a special committee of directors to respond to this proposal and that it would not pursue the deal without special committee approval.
The Dolans said they expect the cable company's senior management team to stay in place with Charles Dolan as chairman and James Dolan as president and chief executive.
They said they expect to continue to run the business substantially in accordance with current practices and keep its employee base, "with changes as necessary to meet competitive challenges."
The family said it would finance the deal in part by investing all its shares in the company, which would have a value of about $1.7 billion based on the offer price.
The total funds needed for the deal are expected to be about $10.9 billion, including refinancing of existing credit facilities, according to the Dolan family, which said it received a commitment letter from Merrill Lynch & Co and Bear Stearns & Co. for debt financing necessary for the deal.
Merrill and Bear Stearns also acted as financial advisors to the Dolans. Law firms Debevoise & Plimpton LLP and Skadden, Arps, Slate, Meagher & Flom LLP were its legal advisors.
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