At this point, I'd say that Cablevision's
For several years now, the family has tried unsuccessfully to take Cablevision private. The Long Island-based company was originally founded by family patriarch Chuck Dolan, and it's now overseen by his son, CEO Jim Dolan. Besides serving roughly 3 million cable, Internet, and telephone subscribers, Cablevision also owns Madison Square Garden, Radio City Music Hall, a programming arm, and a couple of Big Apple-area sports teams. Since 2005, the Dolans have made several offers to take the company private; Cablevision's board accepted the fourth and latest pitch, at $36.26 a share.
However, with a shareholder vote on that offer slated for next week, more and more institutional holders are digging in their heels in opposition. ClearBridge Advisors is a unit of Legg Mason
The deal's proposed price is these investors' sticking point. Given Cablevision subscribers' high-level demographics and the company's other assets, some critics contend that the company is worth as much as $50 a share.
So what is its real value? Based on the simple model I've constructed, I can easily get into the $40s per share, so approaching $50 isn't impossible. The outcome depends largely on the per-subscriber value I place on the telecommunications customers; Comcast
My value estimate only reinforces my contention that the Dolans simply want to buy Cablevision at a lowball price, then flip it for a profit, perhaps to Time Warner Cable
On that basis, and because Cablevision's institutional investors are hardly stupid, I'd be shocked if the buyout effort succeeded. What's more, it'd be nice if the family were as concerned with shareholder value as it seems to be with Dolan shareholder value.
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Fool contributor David Lee Smith only hopes that Madison Square Garden ends up in the right hands. He doesn't own shares in any of the companies mentioned, but he does welcome your comments or questions. The Motley Fool's disclosure policy always puts others first.