In an effort to enhance shareholder value, Cablevision announced that its board has approved exploration of whether to spin-off one or more of the cable MSO’s businesses. The company is also looking at whether to start paying regular dividends or buy back shares to help boost its stock price. The move was not a complete surprise, since President and CEO James Dolan had said in his conference call last week that the company was considering options to close the value gap between its operating performance and the Wall Street value of its shares, but it did give the stock price a boost yesterday.
Cablevision shareholders last year rejected an offer from the Dolan family to take the company private at $36.26 per share as being inadequate. The price has gone down considerably since then, though, and was more than 10 bucks below that level prior to yesterday’s modest improvement. The stock closed at $28.20, up 8.8% for the day.
RBR/TVBR observation: When it comes to potential spin-offs, Cablevision has quite a few options not directly related to its cable operations that serve more than three million households in the New York metropolitan area. It just recently acquired the Newsday daily newspaper on Long Island, so that is probably not on the table. It owns stakes in a number of cable programming channels through its Rainbow Media Holdings Subsidiary. It owns Madison Square Garden and its three main pro sports teams. And it owns Radio City Music Hall, the Beacon Theatre, the Chicago Theatre and Clearview Cinemas.
