It's been a thrill a minute at Cablevision (NYSE: CVC ) this week. On Wednesday the cable company's founding and controlling Dolan family announced an apparently successful third effort to take the firm private. You've got to give the Dolans an "A" for tenacity.
Thursday, the company followed that news with its first-quarter results. The success of its triple-play package of video, high-speed data, and telephone services improved its results -- and trimmed its loss -- from last year. For the quarter, Cablevision lost $26.3 million, or $0.09 a share, compared to a loss of $58 million, or $0.20 a share, last year. Operating income from telecommunications rose 23% to $185.5 million, while revenue increased 15% to $1.14 billion. Because of the capital-intensive nature of cable, even sound, growing companies often post net losses, given the high interest charges with which they must wrestle.
The Dolans -- primarily Chairman Chuck Dolan and his CEO son, Jim -- have tried to privatize Cablevision for several years. In 2005, their initial proposal proved too convoluted, with its differing treatment for the company's cable unit and Rainbow programming segment, and was ultimately withdrawn.
Late last year, the family offered $27 for every share it didn't already own, a bid it sweetened to $30 a share in January. But a two-person special committee of the company's board rejected even that bid as insufficient. Now the Dolans have returned with an offer of $36.26 a share, and the board, whether through satisfaction or fatigue, has approved it.
However, the change won't occur immediately -- if at all. The board, despite its tentative thumbs-up, is nevertheless demanding that shareholders vote to confirm the transaction later this year. Already, some institutional stockholders seem displeased with the Dolans' latest price.
As we await the vote -- or at least, a more defined reaction to the Dolans' offer -- I'd suggest that Fools distance themselves from Cablevision, which currently is trading at only a tiny discount to the Dolans' offer price. If you're determined to participate in the expanding benefits of cable investments, I'd suggest that you consider such sensible, superbly run alternatives as industry leader Comcast (Nasdaq: CMCSA ) or newly public Time Warner Cable (NYSE: TWC ) .
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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your comments or questions. The Fool has a disclosure policy.
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