Media types appear almost numbed by last week's news that New York-area cable operator Cablevision's (NYSE:CVC) Dolan family had made yet another offer to privatize the company.
At $36.26 per share, it was technically the family's fourth bid in the past two years, and since its acceptance by the company's board, it's received relatively little media attention. Perhaps the family's string of offers for Cablevision has simply become old news.
Two years ago, the Dolans -- led by octogenarian Chuck, the company's chairman, and his son Jim, the CEO -- made a complicated bid with differing plans for the company's nearly 3 million cable subscribers and its Rainbow programming entity. Its complexity quickly led to its failure.
A pair of bids followed, one at $27 a share last fall, and a second in January at $30. A two-person special committee of the board rejected both. But the Dolans persisted, and last week the board finally said yes.
I've got two questions about the deal. First, will the Dolans ultimately get this thing done? I think so, but I'm not sure. Some observers, including media-savvy institutional investor Mario Gabelli, contend that the company is really worth more than $50 a share. Gabelli is apparently is considering taking the Dolans' deal, which also must withstand a shareholder vote, before a judge. Stay tuned regarding the viability of the Dolans' bid.
If the deal does go through, what would the Dolans likely do with their new purchase? While the family has disclaimed any desire to flip a newly privatized Cablevision, I'm extremely skeptical. If you look at a map, you see a potentially optimum configuration of Cablevision's cable properties with those of Time Warner Cable (NYSE:TWC). While Time Warner serves most of Manhattan's cable subscribers, Cablevision figuratively encases those operations, with franchises in western Connecticut, Westchester County, parts of northern New Jersey, most of New York City outside of Manhattan, and Long Island.
By the way, Time Warner has expressed an interest in Cablevision's operations. If the family succeeds in taking the firm private, I'm frankly betting on a later acquisition.
Nevertheless, the latest Dolan deal clearly faces hurdles. In the months that it'll take before it the deal is either consummated or withdrawn, I continue to urge Fools with an interest in solid, well-run cable entities to steer clear of this company, and look closely at both Time Warner Cable and industry leader Comcast (NASDAQ:CMCSA) instead.
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Fool contributor David Lee Smith does not own shares in any of the companies mentioned, even Comcast, which he considers an impeccably well-managed company. He welcomes your questions or comments. The Motley Fool has a disclosure policy.
