James Dolan's listening tour is about to begin.
The Cablevision Systems CEO last week backed up his pledge to solicit shareholder input in the company's quest to boost its public valuation. He and other key company executives are expected to start meeting with several top shareholders this week.
Pali Research media analyst Richard Greenfield first broke the news of Cablevision's intentions in a research report last Thursday. Greenfield said Dolan, Cablevision chief operating officer Tom Rutledge and chief financial officer Michael Huseby would selectively meet with the company's top 20 shareholders this week.
“We view this as a clear sign that the Dolan family is seriously interested in some form of buyback/dividend and/or spin of noncore assets,” Greenfield wrote. Greenfield said he hoped Cablevision would broaden the audience (he wrote that Pali has also requested a meeting) given that the company hasn't sat down with investors since its last attempt to take Cablevision private in 2007.
According to executives in the financial community, Dolan, Rutledge and Huseby will be squired by none other than Gamco Investors, the group of funds run by major Cablevision shareholder Mario Gabelli. Gabelli has said that he had offered his firm's services to Dolan to meet investors and apparently the CEO took him up on the offer.
An executive familiar with both companies said that Gabelli & Co., Gamco's institutional research and brokerage affiliate, has set up meetings between top Cablevision shareholders such as T. Rowe Price and management for Monday, Tuesday and Wednesday.
Gamco officials had no comment.
Gamco is expected to be one of the investors meeting with the Cablevision executives. An outspoken critic of the company, Gabelli — whose funds own about 20 million Cablevision shares — called for the Dolans to sell the cable operations to Time Warner Cable in a published report last week.
Dolan will likely have to meet with many of the top funds that rejected the family's $36.26 per share offer to take the cable company private last year. Prior to the Oct. 24 vote — in which 116.5 million shares voted against and 70.6 million voted for the Dolan proposal — large institutional holders like T. Rowe Price, Gamco, ClearBridge Advisors and Marathon Partners came out against the deal.
Their main objection: the offer undervalued Cablevision's assets and did not allow shareholders to participate in a future sale of the cable company. Gabelli has said in the past that he believes Cablevision stock is worth more than $50 per share.
Cablevision spokesman Charles Schueler declined comment.
During Cablevision's second-quarter conference call with analysts on July 31, Dolan said the company was actively pursuing alternatives to close the gap between public and private valuations of the company.
Earlier last week, Cablevision's board of directors said it authorized management to explore several strategies “for bringing the market value of the company's common stock more closely in line with the underlying operating performance of the company.”
Since that announcement, Cablevision stock has risen nearly 30% ($6.35), closing at $27.60 on Aug. 7.
Prior to July 30, Cablevision stock had been down about 14% for the year.