Cablevision Wants Piece Of AT & Ts Excite Offer


Cablevision Systems Corp. apparently wants a say in AT & T Corp.'s plans to restructure Excite@Home Corp.'s ownership.

Cablevision has claimed that Excite@Home's agreement with AT & T, Cox Communications Inc. and Comcast Corp. violates Cablevision's own agreement with the data-over-cable-service provider.

In documents Excite@Home filed at the Securities and Exchange Commission recently, Cablevision claimed that it must consent to the AT & T agreement before it goes through. Cablevision also asserted that AT & T should offer it the same terms as Cox and Comcast or negotiate to have its relationship with Excite@Home terminated.

Excite@Home said it does not believe Cablevision's consent is required.

In an interview last week, Cablevision CEO James Dolan said he hoped the parties could solve their differences. "We believe they needed our consent, we do believe that is true," Dolan said. "We hope that this works out for all parties."

AT & T's plan-in which it would increase its voting control of Excite@Home to 74 percent from 56 percent and would eventually buy out Comcast's and Cox's interests-is aimed at tidying up ownership of the company.

Comcast and Cox also agreed to give up their seats on the Excite@Home board, and they can sell their stakes in Excite@Home for $48 per share, or a total of $3 billion.

Cablevision, which does not have representation on the Excite@Home board, apparently wants the ability to sell its stake, as well.

According to documents, Cablevision owns warrants to purchase about 21 million Excite@Home shares, or 5.2 percent of its outstanding stock. That stock would represent only 3.1 percent voting power.

The ability to exercise those warrants is based on the number of homes delivered to the Excite@Home service. Although Cablevision is in compliance with its pact with Excite@Home, only 10,000 of the MSO's 52,000 high-speed-data customers are Excite@Home subscribers. The rest subscribe to Cablevision's "Optimum Online."

William Blair & Co. LLC analyst Abhishek Gami said he thought Cablevision's assertion would have little effect on the AT & T deal. "They have less muscle in this situation than they may think," Gami said.