A Competitive Edge: Will Or Won’t Cablevision Go Public?

Competition as we’ve all learned can be good, but how about the perks and attention of privately owned business where owners have a huge stake in the operation and who are interested in their customer? Well, if it holds true that a vested interest will guarantee better quality and service then we have a lot (of good things) to look forward to from Cablevision.

Recently, it’s reported that the Dolan family increased its bid to take Cablevision Systems Corp private.

The Dolans up their offer by $1.1 billion noting it was their best and final offer. And, despite the fact that it shares dropped by 2.8 percent and leading analysts declined the offer noting it was still too low.

The Dolan family is the owner of 20 percent of Cablevisions common stock accounting for 70.4 percent of the voting power and they recently increased their offer for all the outstanding shares of the New York cable operator from $27 to $30.

The recent bid puts the company at a value of $8.9 billion and expires on January 17. However, after hitting and all-year high of $30.5 per share the stock fell to $28.8 per share the morning after trading. And, experts suggest that the drop was the reason the analysts rejected the recent offer noting that the only way the off “could have” been approved was if the shares has increased to $31 or $32 per share.

While some (officials) predict(ed) that the Dolans offer would be rejected, the family insists that taking the company private would offer them more latitude through management to adequately deal with a fervently increasing competitive market including telecom companies also offering video services.

However, industry analysts predict that once privatized the company would be sold to a larger operator such as TimeWarner Inc. or Comcast Corp.

Still, the Dolans suggest that a sale is not their intentions and are even willing to negotiate contractual provision concerning that “fact’.

Cablevision, which also owns the Madison Square Garden sports and the New York Knick basketball team, had the privatization offer rejected once before back in 2005.

And, they (The Dolans) note that they will rely on their holding in Cablevision (1.8 billion) in addition to extra funds from debt and preferred equity financing from Merrill Lynch & Co. and Bear Stearns & Co. to finance the bid