August 7, 2008

Cablevision Considering All Options

By Tim Arango

Fresh off the completion of its surprise $650 million acquisition of the U.S. newspaper Newsday, Cablevision Systems is considering a variety of ways to reward investors. The board of the company has authorized management to "take all actions necessary or desirable" to improve shareholder value.

Among the options mentioned in a company announcement Tuesday were regular dividends, a stock buyback plan and possible spinoffs of business units.

Cablevision, which is controlled by the Dolan family, has long baffled Wall Street with its two distinctive components. The cable company serves nearly three million homes in New York, New Jersey and Connecticut, and is regarded as one of the best managed U.S. companies in the business.

Its higher-profile assets, like the New York Knicks basketball team, the Rangers hockey team, Madison Square Garden, Radio City Music Hall and several cable channels including AMC and IFC, are harder for investors to value.

Cablevision said it planned to hire investment bankers and other advisers to consider various strategies.

"We have a strong desire to close the value gap between our operating performance and the market value of our shares," James Dolan, chief executive officer of Cablevision, said in a statement. "Therefore, we will be actively looking at options to accomplish that."

The announcement Tuesday essentially reiterated what Dolan said during a conference call with Wall Street analysts on July 31 after the release of the company's second-quarter earnings. Those earnings surpassed expectations on Wall Street, especially the news that Cablevision had added nearly 7,000 new basic-cable subscribers in the quarter despite increased competition from Verizon, which is introducing its own television service in Cablevision's territory.

That increase in business, combined with Dolan's comments on the conference call, sent Cablevision stock up 14 percent last week and resulted in a spate of analyst upgrades.

Cablevision shares were up $2.27, or 8.8 percent, to $28.20 at the close of trading in New York on Tuesday.

Last autumn, the Dolan family tried but failed to take the company private in a $10.6 billion deal. Later, the company went on a deal-making spree. In addition to buying Newsday, an acquisition that many analysts opposed, the company also paid about $500 million for the Sundance Channel.

Originally published by The New York Times Media Group.

(c) 2008 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved.