It looks like Cablevision Systems Corp. chairman Charles Dolan’s plan to put $3 billion of borrowed money into the hands of his shareholders is beginning to move forward.
Dolan -- who scrapped plans to buy the remaining shares of Cablevision his family didn’t already own and take the cable company private Oct. 24 -- had recommended to the MSO’s board of directors that it issue a $3 billion dividend to shareholders.
Cablevision filed a document with the Securities and Exchange Commission Wednesday morning, stating that its board of directors has authorized management “to take all steps that would be necessary to implement a $3 billion special dividend payable pro rata to all shareholders.”
Issuing the dividend would require approval from the board after the analysis is completed.
That dividend is expected to mean about $10.40 per share for each shareholder. The Dolan family -- which owns about 68.8 million Cablevision shares -- would stand to reap about $715 million from the one-time dividend.
Some analysts had expected Cablevision’s board to reject the special dividend, mainly because it would have to be paid with borrowed money. Oppenheimer & Co. Inc. cable and satellite analyst Tom Eagan had estimated that borrowing $3 billion would push Cablevision’s leverage ratio from about five times 2006 cash flow to seven times.