Cablevision Shareholders Drop Suits to Block Altice Deal

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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suits seeking to block Altice SA's 17.7 billion dollar acquisition of Cablevision Systems, Inc. were voluntarily withdrawn on Dec. 9 without explanation.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

To contact the editor responsible for this story: Keith Perine at

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