Commisso, who owns about 40 percent of Mediacom's common stock, originally offered $6 per share in May, but the bid was rejected by the company's board. Commisso pulled back the reins in August when the Mediacom board balked at a "meaningful," though undisclosed, increase to his initial offer price. (See Commisso Fattens Offer For Mediacom and Mediacom Staying Public.)
Today's board-approved offer of $8.75 per share represents a 46 percent premium over the original, and a 22 percent premium over the stock's close on Friday, Nov. 12. Investors swooped in following Monday's offer, causing Mediacom shares to rocket $1.64 (23.91 percent) to $8.50 each in morning trading.
Why this matters
Going private has increasingly become popular among some major and Tier 2 MSOs. Mediacom's looking to follow in the footsteps of Cox Communications Inc. , RCN Corp. , and Insight Communications Co. Inc. . The Dolan family tried to take Cablevision Systems Corp. (NYSE: CVC) private in 2007, but shareholders thwarted the move.
Mediacom still needs a majority of holders of Mediacom's outstanding class A shares to approve the deal, which is expected to close by mid-2011.
For more on the US cable industry's trend on going private, please check out these stories:
- RCN Going Private Via $1.2B Sale
- Private Equity Firms Gain Some Insight
- Cablevision Shareholders Reject Dolan Bid
- Cablevision Bid Faces Shareholder Opposition
- Cablevision Keeps Family Ties
— Jeff Baumgartner, Site Editor, Light Reading Cable