Gamco Investors Chairman Gabelli Announces Decision To Vote Against Dolan Family's Cablevision Buyout - Update
Gamco Investors (GBL) chairman and veteran money manager Mario Gabelli, in a Securities and Exchange Commission filing, said on Friday that he may not be in favor of the $10.6 billion buyout plan, proposed by the Dolan family, to take Cablevision Systems Corp. (CVC) private. Cablevision has scheduled a special shareholders meeting to vote on the Dolan's proposal for October 24. Gamco and related funds and Gabelli own about 8.5% of Cablevision's outstanding stock and their vote could be crucial. For Dolan's attempt to succeed the bid would require approval from the holders of a majority of the outstanding shares of the company's Class A common shares held by unaffiliated shareholders. The Dolans own a 20% stake in the company mostly through a special class of stock but the family won't be voting. The Bethpage, N.Y.-based cable operator in May agreed to the buyout offer of $36.26 a share by the founding Dolan family. In a regulatory filing last month the company revealed its intention, following closure, to reduce leverage and to cut costs or discontinuing expenses. Gabelli has been saying the family's offer of $36.26 a share was too little. But Friday's filing with the SEC was the first time Gamco publicly revealed that it plans to vote against the deal. "We believe our clients are best served by staying the course in Cablevision," Gabelli wrote to Dolan in a letter posted on the Gabelli Blog. Opposition to the transaction has emanated from other quarters as well. T. Rowe Price, who owns about 13 million of the 230 million shares outstanding, and Marathon Asset Management, which owns about 12 million shares have opposed the deal. Together, these three entities control about 20% of the vote. Gamco and other opponents of the transaction have been publicly saying that Cablevision is worth at least $50 a share. Cablevision, the fifth-largest cable operator in the United States also owns Madison Square Garden, the New York Knicks and Rangers, cable networks and Radio City Music Hall. Supporters of the deal cite the imminent competition including attempts by Verizon Communications Inc. to find a berth in the video business with the fiber optic network named Fios. Also, the company is expected to go through a period of uncertainty should it bid on the New York Yankees if owner George Steinbrenner puts the team on the block. Gabelli said in his letter he still wants to own Cablevision "despite the likely challenges of Fios, Google, a bidding war for the New York Yankees and so on and the concern of New York's susceptibility to an economic downturn." The key to the transaction could be proxy advisor RiskMetrics Group/ISS, who has not weighed it on the deal yet. It is expected that suggestions from them can sway as much as a third of votes on corporate issues. Spokesmen for Cablevision and the family refused to comment on Gamco's filing.
October 14, 2007 11:44 PM