Filed under: Deals, Financials and analyticals, Value and lack thereof, Public or private?

Legendary fund manager Mario Gabelli thinks that price for the Cablevision Systems Corp. (NYSE: CVC) buyout is way too low, and he has some independent backing. According to The Wall Street Journal, ISS Governance Services, one of the leading proxy advisory firms to institutional investors, said in a report Friday that “the theoretical target price for Cablevision, by a number of analysts, is much higher than the current offer price.”

Gabelli’s funds own over 8% of Cablevision. While the company’s shares trade below $35, Gabelli says they are worth $50.

The fight between the powerful fund manager and the Dolan family, which founded Cablevision and plans to take it private, is going to get messy and will probably end up in court. Gabelli probably has one of two goals in pushing the Dolans on the deal’s price. The first would be to get them to increase their buyout offer. The other would be to bring a third celebration like Comcast Corp. (NASDAQ: CMCSA) to the table to make a higher bid of its own.

The Dolans have tried to take the company private twice before. Each time the deal has floundered on price.

The founding family may have a card up its sleeve. The value of cable companies has fallen sharply in current months on increased competition from satellite TV and broadband and video offerings from the big telecom companies. Shares in Comcast have fallen from $30 earlier this year to $24.

For the Dolans, an interesting defense of their bid goes like this: the value of cable companies is falling, so actually we are overpaying to take our company private.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Deals, Financials and analyticals, Value and lack thereof, Public or private?

Legendary fund manager Mario Gabelli thinks that price for the Cablevision Systems Corp. (NYSE: CVC) buyout is way too low, and he has some independent backing. According to The Wall Street Journal, ISS Governance Services, one of the leading proxy advisory firms to institutional investors, stated in a report Friday that “the theoretical target price for Cablevision, by a number of analysts, is much higher than the current offer price.”

Gabelli’s funds own over 8% of Cablevision. While the company’s shares trade below $35, Gabelli states they are worth $50.

The fight between the powerful fund manager and the Dolan family, which founded Cablevision and plans to take it private, is going to get messy and will probably end up in court. Gabelli probably has one of two goals in pushing the Dolans on the deal’s price. The first would be to get them to increase their buyout offer. The other would be to bring a third party like Comcast Corp. (NASDAQ: CMCSA) to the table to make a higher bid of its own.

The Dolans have tried to take the company private twice before. Each time the deal has floundered on price.

The founding family may have a card up its sleeve. The value of cable companies has fallen sharply in current months on increased competition from satellite Television and broadband and video offerings from the big telecom companies. Shares in Comcast have fallen from $30 earlier this year to $24.

For the Dolans, an interesting defense of their bid goes like this: the value of cable companies is falling, so actually we are overpaying to take our company private.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Financials and analyticals, Value and lack thereof, Public or private?, J.C. Flowers

The blind leading the blind. U.K. mortgage bank Northern Rock has almost gone under. If it weren’t for funds provided by the government, it might be gone already. But Northern Rock is still looking for help. In a twist of irony, that aid might come from Citigroup (NYSE: C), which has its own problems with mortgage instruments. The massive U.S. bank said its earnings would drop 60% for the last quarter, some due to mortgage securities to write-downs.

According to a report in The Telegraph, there are many options being weighed to save Northern Rock. “One possibility being discussed by the Government and the company would see Citigroup, the U.S. bank advising Northern Rock, provide a funding line of up to

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Filed under: Financials and analyticals, Value and lack thereof, Public or private?, J.C. Flowers

The blind leading the blind. U.K. mortgage bank Northern Rock has nearly gone under. If it were not for funds provided by the government, it might be gone already. But Northern Rock is still looking for help. In a twist of irony, that aid might come from Citigroup (NYSE: C), which has its own problems with mortgage instruments. The huge U.S. bank stated its earnings would drop 60% for the last quarter, some due to mortgage securities to write-downs.

According to a report in The Telegraph, there are many options being weighed to save Northern Rock. “One possibility being discussed by the Government and the company would see Citigroup, the U.S. bank advising Northern Rock, provide a funding line of up to

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Filed under: Deals, Management, Rumors, Financials and analyticals, Engagements, Investments

Intercontinental Exchange(NYSE:ICE) closed at $157.76. ICE has been frequently mentioned as a potential consolidation candidate over the last 16-months. On 10/2/07 ICE reported September 2007 contract volume rose 33.7% compared to September 2006. ICE is expected to report EPS in October. ICE over all option implied volatility of 44 is below its 26-week average of 48 according to Track Data, suggesting decreasing price movement.

SAP AG(NYSE:SAP), a German software company, announced its $6.8 billion takeover of Business Objects(NYSE:BOBJ), a global provider of business intelligence software solutions BOBJ. Cowen says: “1) What other dilutive deals the company is considering further reducing ROIC? 2) Why SAP paid so much (relatively) for a company that announced 3Q earnings shortfall the same day it got purchased, and 3) can the company integrate such a big acquisitions?”

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Filed under: Deals, Management, Rumors, Financials and analyticals, Engagements, Investments

Intercontinental Exchange(NYSE:ICE) closed at $157.76. ICE has been frequently mentioned as a potential consolidation candidate over the last 16-months. On 10/2/07 ICE reported September 2007 contract volume rose 33.7% compared to September 2006. ICE is expected to report EPS in October. ICE over all option implied volatility of 44 is below its 26-week average of 48 according to Track Data, suggesting decreasing price movement.

SAP AG(NYSE:SAP), a German software company, announced its $6.8 billion takeover of Business Objects(NYSE:BOBJ), a global provider of business intelligence software solutions BOBJ. Cowen says: “1) What other dilutive deals the company is considering further reducing ROIC? 2) Why SAP paid so much (relatively) for a company that announced 3Q earnings shortfall the same day it got bought, and 3) can the company integrate such a massive acquisitions?”

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Filed under: Top deals, Financials and analyticals, Engagements, Shareholders

Tribune Co. (NYSE: TRB) closed at $28.12. Sam Zell announced on April 2, 2007 that his group would pay TRB shareholders $34 per share. The closing has been expected to occur in the fourth quarter of 2007. Alex Brown stated on October 2, “We continue to believe the transaction will close successfully, and reiterate our Purchase rating and $34 price target.” TRB November option implied volatility of 44 is above its 26-week average of 25 according to Track Data, suggesting more massive price risks.

Cablevision Systems Corp. (NYSE: CVC), a leading entertainment and communications company controlled by the Dolan family, closed at $34.79. The Dolan family’s proposal of taking CVC private at $36.26 a share will be voted on at special meeting of CVC shareholders on October 24. CVC has secured board and special committee approval. CVC December call option implied volatility is at 19; puts are at 23, near its 26-week average of 23 according to Track Data, suggesting non-directional price risks.

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Filed under: Rumors, Financials and analyticals, Sallie Mae, $25b, 2007, J.C. Flowers

Despite a 50 basis point drop in the price of money, the Bernanke bailout is not helping the LBO market much. The New York Times [registration required] reports that a $25 billion deal to take student loan bundler Sallie Mae parent SLM Corp. (NYSE: SLM) private is on the skids.

Meanwhile, Bloomberg News reports that the negative side effects of lower interest rates is helping weaken the dollar. This morning it hit a record low of $1.40 relative to the euro. This might actually be good news for companies that derive a significant portion of their revenues from overseas — particularly in Europe. But as someone who is thinking about taking a trip to Europe next year, I’m concerned about how outrageous the prices there will seem to me.

J.C. Flowers, the firm spearheading the SLM buyout, might be willing to walk away from the deal and pay the $900 million breakup fee. Sallie Mae stock now trades 17% below its 52-week high of $58, probably because the market anticipates the deal will either fall apart or be concluded at a much lower price.

Meanwhile, Flowers might seek to trigger a contract clause to get out of the break up fee — claiming that legislation reducing subsidies to student lenders represents a Material Adverse Change (MAC) — which could entitle him to back out of the deal.

I doubt that MAC clause will save Flowers from paying the $900 million if it backs out of the deal. But if its deal for Sallie Mae falls apart, I think it will hammer the nails in the coffin of this decade’s LBO boom. And that’s a MAC I can comprehend!

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Sallie Mae.

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Filed under: Top deals, Financials and analyticals, Engagements, Shareholders

Tribune Co. (NYSE: TRB) closed at $28.12. Sam Zell announced on April 2, 2007 that his group would pay TRB shareholders $34 per share. The closing has been expected to occur in the fourth quarter of 2007. Alex Brown said on October 2, “We continue to believe the transaction will close successfully, and reiterate our Purchase rating and $34 price target.” TRB November option implied volatility of 44 is above its 26-week average of 25 according to Track Data, suggesting more massive price risks.

Cablevision Systems Corp. (NYSE: CVC), a leading entertainment and communications company controlled by the Dolan family, shut at $34.79. The Dolan family’s proposal of taking CVC private at $36.26 a share will be voted on at special meeting of CVC shareholders on October 24. CVC has secured board and special committee approval. CVC December call option implied volatility is at 19; puts are at 23, near its 26-week average of 23 according to Track Data, suggesting non-directional price risks.

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Before heading off to a full day of Taxpayer Advocacy Panel sessions here in drizzly D.C., I buzzed through my e-mail alerts and found these real estate articles that y’all might find of interest, consternation or consideration. We begin north of the border, where a new Canadian report says that energy efficiency actually is counterproductive,… Fore more visit Source:dontmesswithtaxes.typepad.com

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