New York -- Insight Communications Co. Inc. shareholders gathered at the tony Michelangelo Hotel (room rates: $260-$1,735 per night) here Friday to close the latest chapter in the 1.3 million-subscriber MSO’s 20-year history, taking it private.
As expected, there was little fanfare -- about 20 people actually showed up for the meeting, mostly lawyers involved in the deal.
The meeting lasted about 15 minutes, with the final tally at 98.9% of the votes actually cast, or about 36.6 million shares, in favor of the deal. In total, 70% of the shares entitled to vote, or about 121.9 million shares, voted in favor of going private.
Insight is expected to cease trading on the NASDAQ Exchange Monday. However, the company will still file financial statements with the Securities and Exchange Commission because it still has public debt.
Insight cofounders Sidney Knafel and Michael Willner announced in March their intention to purchase the 86% of Insight shares they didn’t already own for $10.70 per share, or about $650 million. Backed by Washington, D.C.-based private-equity firm The Carlyle Group L.L.C., the two men upped their offer in July to $11.75 per share, or about $710 million.
According to the deal, Knafel and Willner will own a 14% stake in the new Insight, with Carlyle controlling the rest.
Insight’s decision to go private was the latest in what appeared to be a trend of publicly traded cable operators turning their back on Wall Street. Cox Communications Inc. completed its $8 billion going-private deal last December.
With little need for additional capital and the growing disfavor among investors toward the sector as a whole -- MSO stocks are down 8% so far this year -- being a publicly traded company lost its luster for Insight.
“We’re looking forward to running the business,” Willner said after the meeting.
Looming on the horizon is the possibility that Comcast Corp. -- which owns a 50% interest in Insight -- will move to dissolve the partnership. According to the partnership agreement, Comcast can trigger a split of the company Dec. 31 and effectively take full control of one-half of Insight’s subscribers.
Comcast said in May that it intends to do just that. In a proxy statement filed earlier this month regarding the going-private transaction, Insight said Comcast has indicated its desire to exercise its option Dec. 31. However, Insight said in the proxy that it has the right to postpone any breakup for at least six months after Comcast exercises its option.
Willner had little to say about Comcast, adding that the two companies have not had any discussions regarding a possible breakup.
“We’ve had an agreement for many years,” he added. “I’m sure we’ll have conversations in the coming months. We’ll see where it goes. It’s a terrific partnership, and it will continue for a while no matter what happens.”
Some cable executives have said in the past that even if Comcast does trigger the breakup, it could take more than one year to complete.