Rocco Commisso gave up on his previous bid to take Mediacom Communications private after meeting resistance from the board on price. But now the founder and CEO is back with a new, higher bid and the independent directors of the cable MSO have given the buyout their blessing.
Commisso had offered $6.00 per share to buy out all other shareholders of Mediacom back in May, but withdrew the offer in August, expressing frustration with the independent directors for rejecting an increased bid. The amount of that bid was never publicly disclosed.
But talks continued and Commisso has now made an offer of $8.75 per share which has been accepted by the board. He notes that the price is a 46% premium to Mediacom’s closing price of $5.33 the day before he made the original bid in May.
It appears that Commisso will pay about $350 million to buy out other shareholders. He’s also assuming about $3.7 billion of debt. Including the 28.1 million shares he already owns (mostly super-voting Class B shares) the new bid appears to value the entire company at about $4.3 billion.
The merger into a new company owned by Commisso is conditioned on a majority of the outstanding Class A shares not held by Commisso, his family and other directors and officers of Mediacom being voted in favor of the going private. The transaction to take the company private is expected to close in the first half of 2011.
Commission is being advised by JP Morgan Securities and BofA Merrill Lynch, with legal counsel by Baker Botts LLP.
The Special Committee of Independent Directors received financial advice from Barclays Capital and legal advice from Simpson Thatcher & Bartlett LLP. Barclays had delivered an option to the Special Committee that the offer is fair to shareholders other than Commisso and the committee unanimously approved it, as did the full board of directors.