Expressing disappointment and frustration, Mediacom Communications chairman and CEO Rocco Commisso on Tuesday announced he has withdrawn his offer to take the cable operator private after a special committee of the company's board of directors rejected his higher offer.
Commisso on May 31, 2010, offered to purchase all the shares of Mediacom not owned by him for $6 per share, a deal which would have cost him about $250 million and valued the MSO at about $427 million. Mediacom's board of directors subsequently rejected "a meaningful increase to his initial offer price," according to Commisso.
In a brief interview with Multichannel News, Commisso declined to disclose the amount of his higher offer. "I was willing to be flexible but the committee wasn't," he said.
Commisso also said his offer to the board's special committee that the deal would be subject to the approval of the holders of a majority of shares of Mediacom that he does not own was a "major gift."
In trading Tuesday morning, Mediacom shares fell about 16%, to about $5.75 per share.
Commisso said in a statement, "I am very disappointed with the highly unusual process and ground rules established by the Special Committee and its financial and legal advisors to evaluate my proposal. I firmly believe that the Special Committee's decision is not in the best interests of Mediacom's shareholders."
According to his statement, Commisso "expressed particular frustration that the Special Committee's rejection of his revised offer deprived Mediacom's public shareholders of the opportunity to decide for themselves whether or not to accept a price for their shares that represents a significant premium to the closing price of Mediacom shares on the trading day immediately prior to the May 31st offer and to the average closing price over the six-month period prior to such date."
The special committee of Mediacom's board of directors formed to evaluate Commisso's offer in June hired Barclays Capital as financial adviser to assist in its review and engaged Simpson Thacher & Bartlett LLP to provide legal advice. Commisso had retained J.P. Morgan Securities and BofA Merrill Lynch as his financial advisors, and Baker Botts LLP as his legal advisor.
Commisso, having terminated discussions with the special committee about taking Mediacom private, said he "remains focused, as he has been since founding Mediacom in 1995, on working with the company's dedicated management team to lead Mediacom's 4,500 employees in providing quality services to Mediacom's customers and delivering value to all of its shareholders."
In recent years, Cox Enterprises took Cox Communications private and Insight Communications was taken private by inside investors and the Carlyle Group. Cablevision's ruling Dolan family, though, failed on three different attempts to take that cable company private, rebuffed by shareholders on the third try in 2007 after a special committee of independent directors approved the offer.