updated 10/24/2007 12:35:28 PM ET 2007-10-24T16:35:28

Shareholders of Cablevision Systems Corp. rejected on Wednesday a $10.6 billion bid by the company’s controlling shareholders, the Dolan family, to take the New York-area cable TV provider private.

The deal had faced opposition from large shareholders, proxy advisory firms and Wall Street analysts who said the company, which owns Madison Square Garden, Radio City Music Hall and the New York Knicks, should have a higher value than the $36.26 per share the Dolans had agreed to pay.

The defeat of the Dolans bid leaves Cablevision to continue as a stand-alone public company, a prospect that CEO James Dolan had acknowledged last week was a possibility after Cablevision’s largest outside shareholder, fund manager ClearBridge Advisors, said it would vote against the deal.

The Dolans have tried several times over the past two years to take the company private, but couldn’t agree on terms with a two-person committee of independent directors on their board.

This May they finally got board approval to buy out public shareholders. One of the conditions was that the deal be approved by a majority of the shares held outside of the family.

That prospect became increasingly doubtful as opposition to the terms grew. Some analysts said the company is worth as much as $50 per share, praising the company’s well-run operations and its affluent metropolitan New York subscriber base.

Besides ClearBridge, fund manager Mario Gabelli came out against the deal.

“Our valuation indicates that there’s too much left on the table,” Gabelli said Tuesday. “From our end, we don’t want more money. ... We want to be part of the buying group.”

In a regulatory filing, Gabelli, who controls 8.3 percent of Cablevision’s stock, said he would go to court to seek a higher price for his shares if the deal went through. His funds were prepared to exercise an appraisal right, which would force a court to determine the value of the stock and award the holder the difference if the figure was higher than the final offer.

The Dolan family controls about 65 percent of the company’s vote through a special class of shares with powerful voting rights. Charles Dolan is the company’s chairman and his son James is the CEO.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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