Dolan family buys Cablevision, who own Knicks
Cablevision Systems Corporation (NYSE: CVC) announced today that it
has entered into a definitive merger agreement with an entity created by members of the Dolan Family
Group, pursuant to which all outstanding shares of Cablevision that the Dolan Family Group does not
already own will be converted into $36.26 per share in cash. The transaction implies a total enterprise
value of approximately $22 billion.
Following extensive negotiations, the Special Transaction Committee of independent directors of
Cablevision, advised by independent financial and legal advisors, determined that the transaction is in the
best interests of Cablevision’s public shareholders. Based on the recommendation of the Special
Transaction Committee, Cablevision’s Board of Directors, including independent directors, voted to
approve the transaction.
The price of $36.26 per share represents a 34% premium to the Dolan Family Group’s $27.00 per share
offer on October 8, 2006, a 21% premium to its $30.00 per share offer on January 12, 2007, and more
than a 50% premium to Cablevision’s closing price of $23.93 on the last trading day prior to the October
The transaction is conditioned on a “majority of the minority” voting provision, which requires approval
by holders of a majority of Cablevision’s outstanding Class A shares not held by the Dolan Family Group
or Cablevision’s directors and executive officers. The transaction is also subject to certain regulatory
approvals, the receipt of funds pursuant to already committed financing and other customary closing
Charles F. Dolan and James L. Dolan, speaking on behalf of the Dolan Family Group, said, “The Dolan
family founded Cablevision nearly 35 years ago, and we are very proud of the company’s track record of
delivering quality service and innovative products to our customers. We believe the best way to continue
this tradition in today’s increasingly competitive environment is as a privately held company. This new
structure and an entrepreneurial perspective will enable us to keep growing the business with our talented
management team and dedicated employees.”
In the transaction, the Dolan Family Group will contribute approximately $2.1 billion in equity to the
transaction through reinvestment of its Cablevision shares in the new privately held company. Merrill
Lynch & Co., Bear, Stearns & Co. Inc., and Bank of America have committed to provide approximately
$15.5 billion in debt financing to fund the merger consideration and refinance certain bank indebtedness
of Cablevision. The company’s existing notes and debentures will remain outstanding.
Lawyers representing shareholders in the pending going private action in Nassau County Supreme Court
actively participated in the negotiations, which led to improvements to the financial terms of the
transaction as well as significant contractual protections for shareholders. Included in the monetary
benefits provided to shareholders in the transaction is additional merger consideration payable directly to
the shareholders in exchange for succeeding to Cablevision’s and shareholders’ rights in connection with
claims involving alleged options backdating. The parties have agreed in principle to the dismissal of the
pending going private litigation, subject to approval by the Nassau County Supreme Court.
The Dolan Family Group received financial advice from Bear, Stearns & Co. Inc. and Merrill Lynch &
Co. and legal advice from Debevoise & Plimpton LLP and Skadden, Arps, Slate, Meagher & Flom LLP.
The lenders were represented by Shearman & Sterling, LLP.
The Special Transaction Committee’s financial advisors, Lehman Brothers Inc. and Morgan Stanley &
Co., have delivered opinions that the transaction is fair from a financial point of view to Cablevision’s
public shareholders. The Special Transaction Committee received legal advice from Willkie Farr &
Cablevision Systems Corporation is one of the nation's leading entertainment and telecommunications
companies. Its cable television operations serve 3.1 million households in the New York metropolitan
area. The company's advanced telecommunications offerings include its iO: Interactive Optimum digital
television, Optimum Online high-speed Internet, Optimum Voice digital voice-over-cable, and its
Optimum Lightpath integrated business communications services. Cablevision's Rainbow Media
Holdings LLC operates several successful programming businesses, including AMC, IFC, WE tv and
other national and regional networks. In addition to its telecommunications and programming businesses,
Cablevision owns Madison Square Garden and its sports teams, the New York Knicks, Rangers and
Liberty. The company also operates New York's famed Radio City Music Hall and legendary Beacon
Theatre, and owns and operates Clearview Cinemas.