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Cablevision will go private

Independent directors spoke in favor of the Dolan family's offer, worth $36.26 a share.

NEW YORK - Cablevision Systems Corp., a New York-area cable TV provider that also owns Madison Square Garden, said yesterday that it had agreed to be taken private by the Dolan family, the company's controlling shareholders, in a deal worth about $10.6 billion.

It was the Dolans' third attempt to take the company private in recent years, the first two having been rejected as inadequate by a two-person committee of independent directors on its board.

That committee and the full board of directors have approved the Dolans' latest offer of $36.26 a share, the company said in a statement, adding that it was in the best interests of public shareholders.

Last fall, the Dolans offered to take the company private at $27 a share in cash. In January, they raised the offer to $30.

Besides rejecting those bids, the directors had also rejected a more complex one that the Dolans made in 2005 to pay $21 in cash plus stock from a new public company containing Madison Square Garden and a group of cable channels.

The latest offer represents an 11 percent premium over Cablevision's closing price of $32.67 Tuesday, before the deal was announced. Yesterday, Cablevision's shares rose $3.23, nearly 10 percent, to $35.90.

The Dolans, led by Charles Dolan, the chairman, and his son James, the chief executive officer, control Cablevision through a special class of supervoting shares. The independent directors had to sign off on any going-private transaction to ensure that public shareholders got a fair deal.

As one of the conditions of the deal announced yesterday, the transaction must be approved by a majority of the holders of Cablevision's publicly traded stock that is not held by the Dolan family.

Charles Dolan said in a statement that Cablevision would be better able to compete in today's "increasingly competitive environment" as a privately held company.

Like other cable companies, Cablevision faces competition for video customers from satellite broadcasters such as DirecTV Group Inc. as well as phone companies such as Verizon Communications Inc., which are starting to offer video services.

Two other major cable companies, Cox Communications Inc. and Insight Communications Co. Inc., have also gone private in recent years, frustrated with the low values of their shares in the public market.

The earnings of many cable companies took hits in recent years as they invested in building up the digital capacity of their systems to better compete with service from satellite broadcasters.

Now, led by Cablevision in particular, they have raised revenues and increased their ability to retain customers with "triple-play" offerings of digital video, high-speed Internet and phone service.

Cablevision has about three million cable TV customers, mainly in the New York area, and also owns Radio City Music Hall as well as Madison Square Garden and the professional teams that play there, the Knicks of the NBA and the Rangers of the NHL.