News Day (New York)

May 26, 2004 Wednesday


From Lexis Nexis

Make me an offer.

That's what Cablevision Systems Corp. chairman Charles Dolan seemed to be saying yesterday when asked whether he would consider selling the company to Time Warner.

His response to a shareholder question at the cable operator's annual meeting in Bethpage appeared to go intriguingly beyond the usual comment that any offer benefiting shareholders would be considered.

"If Time Warner came out with an interesting offer we would certainly pay attention to it," Dolan said, adding that, "No, we have not had specific offers. There has not been anything offered to accept."

Time Warner, the nation's second-biggest cable operator and the second-biggest in the New York metropolitan area, has long coveted Cablevision, the biggest in the area, which is preparing to spin off its satellite venture.

But lately Time Warner's focus for a potential acquisition has appeared to shift more toward Adelphia Communications, which has said it will explore a possible sale as it seeks to emerge from bankruptcy.

The problem with Cablevision has been that Dolan, whose family controls the company, has not appeared eager to sell, at least at a price that Time Warner would consider acceptable.

"Any type of consolidation or event like that would require a valuation that we have not seen before," Cablevision chief executive James Dolan said at an investment conference in December.

That could mean more than $5,000 for each of the company's nearly 3 million cable subscribers, or $15 billion. If Adelphia, which has more than 5 million subscribers, is sold it is expected to fetch nearly $20 billion, or about $4,000 per subscriber.

Time Warner chairman Richard Parsons has said the company will be disciplined in not overpaying for any acquisition.

Cablevision's relatively well-off subscriber base is considered to be one of the most attractive in the nation since it responds strongly to new services. Dolan said Optimum Voice, the phone service using Internet technology that Cablevision launched last year, has topped 100,000 customers, which means more than 71,000 have signed up this year alone.

Speculation about a possible takeover of Cablevision has heightened recently as the company prepares to spin off its Voom nationwide satellite-TV service as a separate company. Charles Dolan will leave Cablevision to become chairman of the spinoff.