Despite growing shareholder disapproval, the Dolan family has said it will not increase its buyout offer to take Cablevision private. The stock price has been falling due to the likelihood that the offer of 36.26 per share will be voted down on October 24th.
"On behalf of my parents, brothers and sisters, I want to state emphatically that there will be no modification of the family’s accepted offer to acquire Cablevision. We are looking forward to next week’s vote and hope that the transaction is approved, but I’d underscore that I am completely prepared to continue to lead the company into the future as a public company if the transaction is not approved," said a statement from Cablevision President and CEO James Dolan.
Despite that vow by the Dolans not to increase their bid, Cablevision’s largest institutional shareholder announced just a few hours later that it would vote against the buyout at the current price.
"ClearBridge Advisors, a US equity manager owned by Legg Mason, Inc, today announced that it has decided to vote its shares against the proposed 36.26 per share bid made by the founding Dolan family. At the proposed offering price, ClearBridge Advisors does not feel that the shareholders are being adequately compensated for the expected growth in Cablevision’s free cash flow – as reflected in its Schedule 14A dated September 14, 2007 – nor the value of the other assets owned by the company," said ClearBridge, noting that it owns more than 31 million shares of Cablevision with a market value in excess of one billion bucks. T. Rowe Price and the funds run by Mario Gabelli had previously indicated that they would reject the buyout offer.
TVBR observation: Only about 80% of Cablevision’s shares can be voted on October 24th, since the Dolans don’t get to vote on their own buyout bid. At least a third of the eligible votes now appear to be firmly against the offer and the "no" votes could easily prove to be the majority and kill the deal – keeping Cablevision a public company.