Mediacom CEO Won't Take Cabler Private

Rocco Commisso

Cable operator Mediacom's stock tumbled more than 15% Tuesday as the company announced that CEO Rocco B. Commisso had withdrawn his offer to buy out shareholders and take the company private.

Commisso made his initial $6-a-share offer -- originally a 12.6% premium -- to purchase all the shares he does not already own in May. He said in a statement that he had since raised the amount -- he called it "a meaningful increase" -- but did not offer specifics.

The amount of Commisso's increased offer may have only been known by a special committee of Mediacom's board of directors, which rejected it. The stock closed at $5.80 a share on Tuesday.

In his statement, Commisso expressed frustration that the special committee evaluating his bid did not allow his proposal to go before a vote of shareholders.



His initial offer marked a 12.6% premium above the share price as of market close on May 28.

Thomas V. Reifenheiser, also a member of the Cablevision board, and Natale S. Ricciardi, a senior vice president at Pfizer, made up the special committee, where they were advised by Barclays Capital.

Commisso said he would remain as head of the company he founded in 1995 and not sell any of his holdings. As of the end of 2009, he owned enough shares to give him 87.2% of voting control.

Mediacom says it is the eighth-largest cable operator and reported 850,000 video customers as of June 30.

Even during the economic troubles, the company posted a $57 million profit over the first six months of 2009, which followed a $10 million loss the year before. Over the first six months of this year, profits narrowed to about $5 million.

Revenues through the first six months of this year rose about 3% to about $746 million.

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