For the third time in two years, efforts by the Dolan family to take Cablevision private ended in failure, as Cablevision shareholders voted against the family’s latest offer of $10.6 billion on Wednesday. Founded 35 years ago by Charles Dolan, Cablevision now ranks as one of the largest regional cable firms in the U.S. with more than three million customers in the New York area. In addition to controlling several cable networks, the company also owns Madison Square Garden, Radio City Music Hall and two major New York sports teams: the Knicks and the Rangers. After having its first two privatization bids turned down by the Cablevision board, the Dolan family returned to the bargaining table in May with an offer of $36.26 per share that was ratified by the board. However, to win the support of board members, the Dolans agreed to certain terms that included approval of the deal by a majority of shares held outside of the family. (The Dolans control 65% of Cablevision through a special class of shares that carry powerful voting rights.) After several analysts estimated Cablevision’s value in excess of $50 per share, discontent with the deal grew as shareholders complained that the price offered by the Dolans was too low. Last week, Clearbridge Advisors—a hedge fund that ranks as Cablevision’s largest shareholder—sounded the death knell as it confirmed plans to vote against the transaction. Fund manager Mario Gabelli, the holder of an 8.3% stake in Cablevision, took his opposition a step further, warning in a regulatory filing that he would exercise appraisal rights that allow the courts to determine the fair value of his shares if shareholders approved the deal.
While admitting disappointment, Charles Dolan and his son James—Cablevision’s CEO—put their best face forward, declaring: “we see today’s outcome as a vote of confidence in the prospects of Cablevision, its management team, its 20,000 employees and the industry’s future.”