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Done deal: Mediacom goes private

Fri, 03/04/2011 - 8:00am
Mike Robuck

Mediacom Communications officially became a private company at the close of the stock market today following a shareholder vote this morning.

This morning minority shareholders overwhelmingly voted in favor, by a 97 percent margin, of selling the remaining class A and class B common stock that Chairman, CEO and founder Rocco Commisso did not already own. The shareholders voted together as a single class and now Mediacom is a private company wholly-owned by Commisso.

In addition, the merger agreement contained a "majority of the minority" voting condition, which required approval by the affirmative vote of holders of at least a majority of the outstanding shares of Mediacom's Class A common stock, exclusive of shares held by Commisso, his affiliates and immediate family members, and the executive officers and directors of Mediacom ("Public Shares"). The "majority of the minority" voting condition was satisfied, with approximately 97 percent of the Public Shares voted at the special meeting voting in favor of the adoption of the merger agreement.

"I was gratified to see our public stockholders overwhelmingly approve the going-private transaction at today's meeting," Commisso said. "Our management team and fellow employees can now focus full time on delivering the best experience to our customers. I am excited for the company and our employees as we enter a new chapter in our history."

"I wish to extend my heartfelt gratitude to the members of our board of directors, most of whom served the company since our initial public offering in 2000. Throughout the years, they made tremendous contributions, provided sound wisdom and advice to our management team, and at all times upheld the interests of public stockholders. I wish them well in their future endeavors."

BNY Mellon, as paying agent for the merger, will mail to Mediacom stockholders materials to advise them of their rights and facilitate receipt of payment for their Mediacom shares.

Shares of Mediacom's Class A common stock will be suspended from trading on the Nasdaq Global Select Market prior to the market opening on Monday.

Commisso received financial advice from J.P. Morgan Securities LLC and BofA Merrill Lynch and legal advice from Baker Botts LLP.

The Special Committee of Mediacom's Board of Directors received financial advice from Barclays Capital Inc. and legal advice from Simpson Thacher & Bartlett LLP. In addition, Mediacom received legal advice from SNR Denton US LLP.

Commisso first proposed taking Mediacom private in June of last year with a  bid of $ 6 per share, after some back and forth between Commisso and the shareholders, including Commisso withdrawing his offer in August, Commisso and the shareholders agreed in November to complete the deal for $8.75 per share in cash.

Following the vote by shareholders, Mediacom spent part of today closing the deal, but could not make an announcement until after the stock market closed. By noon today the closing was nearly completed.

 Near the end of 2009, Mediacom, which is the nation's eighth-largest cable operator, was trading at $4.47 per share and its final 52-week range was $4.67 to $8.86. Mediacom hit the high of $8.86 earlier today. At 3:30 EST, Mediacom was trading at $8.81 per share on the stock market.

Now that Mediacom is a private company, it will no longer have to file earnings reports and hold conference calls on its quarter and yearly results. A spokesman for Mediacom said the company will now be able to focus on long-term goals instead of meeting quarterly expectations.

Last Friday Mediacom released unaudited results for the fourth quarter and last year to give shareholders additional information prior to today's vote.

Commisso founded Middletown, N.Y.-based Mediacom in 1995. As of April last year,  Mediacom had roughly 68.1 million shares of Class A and B outstanding, bringing the total value of the deal to about $408.6 million.

By going private, Mediacom has followed in the footsteps of Cox Communications and Insight Communications, which went private in 2004 and 2005, respectively.

Mediacom has launched DOCSIS 3.0 and multi-room DVR services in some areas of its footprint, which primarily consists of smaller towns and cities across the Midwest and Southern regions.  It's the largest provider of broadband services in Iowa and the second largest in Illinois.

Last month Mediacom undertook its first major analog-to-digital conversion project in a nine-county area around Cedar Rapids, Iowa.

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