The Telecommunications Law Resource Center is the most comprehensive reference and news platform for communications law, covering broadcasting, cable, broadband, telephony and wireless;...
By Tim McElgunn
Dec. 11 — Two Cablevision shareholder suits seeking to block Altice SA's 17.7 billion dollar acquisition of Cablevision Systems, Inc. were voluntarily withdrawn on Dec. 9 without explanation.
Shareholders Arnold Wandel and James Gould, in separate filings on Sept. 24, alleged that Cablevision's board of directors failed to maximize the value of the deal to shareholders.
While no reasons were given for the decision to drop the actions, the two shareholders likely decided that they were unlikely to prevail, given the high multiple offered by Netherlands-based Altice.
Altice's offer of $34.90 per share for Cablevision was 22 percent above the company's share price at the time of the announcement on Sept. 7. The deal values Cablevision at 9.5 times adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization)—a measure of free cash flow—of $1.86 billion for the twelve months ending June 31. That was approximately 17 percent higher than the industry average valuation in the second quarter of 2015, according to Bloomberg Intelligence, which says cable merger and acquisition multiples have hovered around 7.5-8.5 times forward Ebitda.
Wandel's suit alleged Cablevision's board accepted “inadequate consideration, and by agreeing to preclude other potential acquirers from tending superior proposals,” breached its fiduciary duties.
In his suit, Gould added that the company failed to “take steps to maximize the value of Cablevision to its public stockholders in connection with the sale of the company to Altice.”
By contrast, industry analysts perceive Altice's offer as aggressive, and are not fully convinced the company can achieve the synergy savings and resulting cash flow improvements it has used to justify the offer.
“Both of these cases were thoroughly without merit,” Cablevision said in a statement.
To contact the reporter on this story: Tim McElgunn in Cherry Hill, NJ at firstname.lastname@example.org
To contact the editor responsible for this story: Keith Perine at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)