Cablevision agrees to be taken private

Cablevision Systems Corp., a New York-area cable TV provider that also owns Madison Square Garden, said Wednesday 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 Cablevision’s board.

That committee, and the full board of directors, have approved the Dolans’ latest offer of $36.26 a share.

Last fall the Dolans offered to take the company private at $27 a share in cash, and in January raised the offer to $30 a share, but that offer too was deemed inadequate by the board committee.

Those directors had also rejected a more complex bid the Dolans made in 2005 to pay $21 a share in cash plus stock from a newly created public company containing Madison Square Garden and a group of cable channels.

The latest offer represents an 11% premium over Cablevision’s closing price of $32.67 on Tuesday, before the deal was announced. On Wednesday, Cablevision’s shares rose $3.23, nearly 10%, to $35.90.

Cablevision has about 3 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.

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

Like other cable companies, Cablevision faces competition for video customers from satellite broadcasters such as El Segundo-based 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., also have gone private in recent years, frustrated with the low values of their shares in the public market.