• by Wayne Friedman , May 3, 2007

In an effort to keep out of the public eye of stock-market analysts and investors, the controlling Dolan family has finally taken Cablevision Systems private.

With some cable and media stocks languishing, many companies are looking to buy back stock, or take companies private. The $36.26-a-share price from the Dolans, totaling $10.6 billion, is 34% higher than the proposal they made for the company back in October. It is also a premium of 11% over Cablevision's closing stock price on Tuesday.

The family will pay for the deal with $2.1 billion in equity through reinvestment of their Cablevision shares, and $15.5 billion in debt financing. The Dolans control 70% of voting power of the company.

Cablevision owns cable systems in the New York area, going to more than 3 million subscribers. In addition, the company's assets include Madison Square Garden, the New York Knicks and Rangers and several cable entertainment networks, under its Rainbow Media Holdings group. Plus, the company draws major sales for its triple play of services: digital TV, phone and Internet. But failed deals such as Voom, an ill-fated satellite TV entertainment service, proved costly.

The Voom debacle was played out between Charles F. Dolan, Cablevision's founder and chairman, and a son, James L., the chief executive--with the elder Dolan looking to keep the unit going as a private entity. James eventually won the battle, and Cablevision shut down the unit in 2005. But it sent a message to investors: Cablevision's management wasn't always on the same page.

The buyout is the latest in many attempts by the Dolans to take the company private. In 2005, they made an offer to break the company in two and buy Cablevision's cable TV assets. But they were forced to withdraw the offer before the board formally rejected it.

In recent years, other cable system operators, Cox Communications and Insight Communications, became private companies.