Wednesday, October 24, 2007
The special meeting of stockholders of Cablevision Systems Corporation is to be held today to vote on the third take-private proposal put forth by the Dolan family. For those who wish to attend the meeting is at 11:00 A.M., New York time, at their corporate headquarters building at 1111 Stewart Avenue, Bethpage, New York, 11714. The Dolans are a pretty rich bunch so perhaps there will be some good free food, or maybe even a Knick.
The vote is going to be a close one. Earlier this week, Mario Gabelli's GAMCO stated in an SEC filing that they would exercise appraisal rights with respect to the 19,042,259 shares of Cablevision they own. This represents about 8.25% of the total number of outstanding shares. And the Gabelli's issued their own statement. Cablevision President and CEO James L. Dolan stated:
On behalf of my parents, brothers and sisters, I want to state emphatically that there will be no modification of the family’s accepted offer to acquire Cablevision. We are looking forward to next week’s vote and hope that the transaction is approved, but I’d underscore that I am completely prepared to continue to lead the company into the future as a public company if the transaction is not approved.
For those handicapping the deal, note two very important milestones. Under the merger agreement, the required vote to approve the plan is a majority of the minority of the unaffiliated, public stockholders. But, even if the majority of the minority provision is met, the deal can still fail because it is conditioned on no more than 10% of Cablevision's class A shareholders exercising appraisal rights under Delaware law (DGCL 262). The condition specifically requires that:
The total number of Dissenting Shares shall not exceed 10% of the issued and outstanding shares of Class A Stock immediately prior to the filing of the Merger Certificate . . . .
Under Delaware law appraisal rights need to be exercised prior to the meeting today. So, if the deal is approved, also look in the announcement of the vote for the number of dissenting stockholders. If it is over 10% the Dolan's can walk. In the words of a Yankee -- "it ain't over until it is over"