The Dolan family's buyout of Cablevision Systems Corp. (NYSE: CVC) has hit yet another snag. Earlier this week, Doug McIntyre wrote about opposition to the deal from legendary manager Mario Gabelli, whose funds own 8% of Cablevision stock. Gabelli is arguing that at $36.26, the value offered in the deal, Cablevision shares are undervalued. He thinks the shares are actually worth $50 or more and is trying to get the Dolans to increase their $10.6 billion dollar deal accordingly.
Now comes the news that the largest institutional shareholder in Cablevision, ClearBridge Advisors, may also oppose the deal. ClearBridge owns 31.4 million shares, or 13.6% of Cablevision. ClearBridge's opposition should be enough to reject the offer.
A report in The New York Times suggests that ClearBridge may be playing a game of chicken with the Dolans. At $36.26 per share, ClearBridge would make money on the deal; it just wants to make even more. But so far, the game isn't working. Last night, James Dolan, Cablevision's CEO, released a statement saying the family would not increase the value of its buyout offer.
The vote on the deal is scheduled for October 24.
More trouble for the Cablevision buyout
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