Cablevision, Private Buy Out for $7.9 B

Elena
09 Oct, 2006
New York City

The offer represents about a 13% premium to the stock closing price Friday of $23.93 on the New York Stock Exchange. Company

[R]8:30AM The Dolan family offered to take Cablevision private for $7.9 billion.[/R]
Cablevision Corp.'s founding family offered to take the cable-television operator private in a deal valued at $7.9 billion, or $27 for each Cablevision ((CVC)) share they do not already own. The offer represents about a 13% premium to the stock''s closing price Friday of $23.93 on the New York Stock Exchange. The Dolans would also assume $11.3 billion in debt as part of the leveraged buyout. The New York Times reported that the deal is valued at $19.2 billion, which includes the assumption of debt debt. The offer comes about 16 months after the Dolans made a bid to buy the company''s cable unit and spin off its other assets. Company’s shares climbed 12% in premarket trading.


[R]8:00AM The PNC Financial Services agreed to buy Mercantile Bankshares for $6 B.[/R]
The PNC Financial Services ((PNC)) agreed to buy Mercantile Bankshares ((MRBK)) in a deal worth $6 billion, or $47.24 a share, in cash and shares. Mercantile shareholders will receive 0.4184 shares of PNC common stock and $16.45 in cash for each share they own. Citigroup and Goldman Sachs are financial advisors of PNC, while Sandler O''Neill & Partners advised Mercantile. PNC hopes that the takeover will contribute to earnings growth in 2008, and that it has an estimated internal rate of return of approximately 15%. The banks predict the reduction of over $100 million of operating expenses through the elimination of operational and administrative redundancies.

[R]7:30AM South Korean stocks fell in the wake of N. Korean nuclear test.[/R]
Asian markets finished lower on Monday. The benchmark Korea Composite Stock Price Index, or Kospi, fell as low as 1,303.62, or 3.6%. Markets in South Korea have long been considered vulnerable to potential geopolitical risks coming from the North.

In Hong Kong, the Hang Seng Index ended 1.27% lower at 17,675.24. Straits Times Index in Singapore fell 1.2% to 2,618.05 in afternoon trading. Share prices in Sydney, Jakarta and Manila were lower; Australia S&P/ASX 200 index dropped 0.2% to 5,209.00.

China bucked the downward trend. Banks led the stock market to a five-year high on expectations Industrial & Commercial Bank of China will make a strong debut late this month. The benchmark Shanghai Composite Index ended up 1.9% at 1,785.39, its highest closing level since it settled at 1,793.88 on Sept. 25, 2001.


[R]6:30AM European stocks declined Monday morning on geopolitical concerns.[/R]
European markets were broadly lower by mid-morning on Monday. Frankfurt Xetra Dax shed 0.5% to 6,058.62 and the CAC 40 in Paris lost 0.3% to 5,265.38. London FTSE 100, however, added 0.3% to 6,017.8, buoyed by its greater weighting in oil and mining stocks, as crude and metals prices rallied.

Advancers

Shire, the drugs company, gained 9.1% after getting the go-ahead in the US for a new attention deficit drug. Oil companies advanced. Austria OMV gained 2.4%, Italy Eni added 1% and Norway’s Statoil climbed 2%.

TeliaSonera, the Nordic region largest telecoms operator, gained 2.9% after Cevian, the activist fund bought 72 million shares to become the fourth-largest shareholder.

Decliners

Volkswagen fell 1.1% after the Financial Times reported MAN would drop its bid for Scania, its rival truckmaker, so the three companies can enter negotiations to enter a three-way alliance.

Investor, the Swedish fund manager and second-largest shareholder in Scania, fell 2.5%. Renault shares slipped 0.4% as expectations of a tie up with General Motors faded. Peugeot, shed 2% after Morgan Stanley downgraded the stock from overweight to equal weight.

Banking stocks gave back some of their recent, M&A-driven gains. Austria Erste Bank fell 1.9%. It is awaiting judgement today from Romanian lawmakers on its intended acquisition of the country top bank BCR. Raiffeisen, Erste domestic rival, and competitor in high-growth eastern European markets, fell 1.5%.

Oil and gold

Crude oil for November delivery rose 51 cents to $60.27 a barrel in electronic trading on the NYME. In London, November Brent gained 38 cents to trade at $60.21 a barrel on the ICE Futures exchange.

Gold rose after North Korea carried out its first nuclear-weapons test and as higher base metals prices boosted purchases of commodities as a basket. Gold for immediate delivery rose $5.63, or 1%, to $579.72 an ounce.

Currencies

The euro was barely changed Monday against the U.S. dollar, while the Japanese yen was slightly lower after North Korea claimed to have tested a nuclear weapon. The euro bought $1.2601 in morning European trading, compared with $1.2595 late Friday in New York. The British pound slipped to $1.8678 from $1.8705. The dollar rose to 119.12 yen from 118.98 yen.