NEW YORK (AP) _ The family that controls Cablevision Systems Corp., a major cable company in metropolitan New York, has abandoned a bid to take the company private after failing to agree to terms with the company's board of directors.
At the same time, the Dolan family also recommended that the company declare a special one-time dividend of $3 billion to all shareholders. The company said it would consider the proposal.
The news sent the company's shares plunging $3.30, or nearly 12 percent, to $24.50 in morning trading on the New York Stock Exchange.
Investors had bid the shares higher this summer after the Dolan family announced on June 19 that it planned to buy out the company's public shareholders. But the company's shares have weakened since September along with the shares of other communications companies.
The Dolan's retreat marked the latest twist in a drawn-out family saga at the Long Island-based company, and could be a sign of easing tensions between the company's founder, Chairman Charles Dolan, and his son James, the CEO. The Dolans did not immediately respond to request for comment.
The Dolans had proposed a transaction that would have resulted in Cablevision being split into two separate entities, a privately controlled cable TV company run by Charles Dolan, and a separate, publicly traded company with cable networks, sports teams and Madison Square Garden that would have been run by James.
At the time, that deal was seen as a way to resolve a feud between Charles and James, who had had a fierce showdown earlier over a satellite television venture that was eventually shut down.
Charles Dolan had publicly championed the high-definition TV venture, called Voom, but James had sided with board members who opposed it.
The going-private deal would have resulted in the new company holding lucrative cable channels _ AMC, IFC and WE _ in a company called Rainbow Media Holdings that would also include several regional sports networks, Madison Square Garden and the sports teams that play there, the New York Knicks and the New York Rangers.
Under the original proposal, Cablevision shareholders were to receive $21 per share in cash as well as stock in Rainbow estimated to be worth $12.50 per share. The Dolan family controls the company through a special class of supervoting shares.