Cablevision (CVC) is supposed to go private in a transaction lead by the company’s founding Dolan family. The shares currently trade at $34.
Uber-fund manager Maria Gabelli, whose investment companies hold 8% of Cablevision’s shares thinks that the price for the IPO should be closer to $50. According to The Wall Street Journal, Gabelli has some independent support for voting against the deal. ISS Governance Services, one of the leading proxy advisory firms to institutional investors, said in a report Friday that "the theoretical target price for Cablevision, by a number of analysts, is much higher than the current offer price."
Several other funds are likely to join Gabelli in his campaign, which could go to court.
Gabelli should be more careful about what he hopes for. Over the last year, Cablevision shares are up 20%. Until concerns about the LBO surfaced, the number was closer to 30%. Over that same period, the stock in cable industry leader Comcast (CMCSA) is off almost 20%. And, other big cable companies like Charter (CHTR) have also lost ground. The only thing holding up the CVC shares is the LBO offer.
The market’s perception is that cable is beginning to lose ground to the new broadband and TV offerings from telecom companies like Verzion (VZ) and the HDTV products from satellite TV company DirecTV (DTV)
Cable is hurting. Gabelli ought to take the Cablevision LBO cash and get out of town.
Douglas A. McIntyre