Cablevision Systems Corp. made it official Thursday night, announcing that
its wireless-telephone subsidiary, Northcoast Communications LLC, has agreed to
sell personal-communications-systems licenses in 50 markets to Verizon
Communications Inc. for $750 million in cash.
The deal is expected to close by the second quarter of 2003.
The price for the licenses comes in at the high end of most analysts'
valuations. Analysts had previously estimated the value of the PCS licenses at
between $500 million and $750 million.
The licenses cover major metro markets on the East Coast and in the Midwest,
including New York; Boston; Minneapolis; Columbus, Ohio;
Providence, R.I.; Rochester, N.Y.; and Hartford, Conn.
Cablevision -- which owns a 49.9 percent equity and a 90 percent economic
interest in Northcoast -- said approximately $60 million will be used to pay
Northcoast's Federal Communications Commission debt. Cablevision's cut of the
proceeds -- about $635 million -- will be used to pay down bank debt, the
"As part of our growth plan, we continue to deliver on our commitment to
maximize the value of our noncore assets," Cablevision CEO James Dolan said in a
prepared statement. "Northcoast Communications has proven to be an excellent
investment for Cablevision," he added. "We still believe that there is huge
potential in wireless and expect that the use of these licenses will be very
fruitful for Verizon Wireless."