Cablevision Surges on Spinoff Plan

Cablevision (CVC) jumped 14% Monday after the suburban New York cable operator rolled out a plan to spin off to shareholders its satellite and cinema operations.

Cablevision said the move, which will create a new separately traded entity containing its Rainbow DBS and Clearview Cinemas units, will reduce its cost of capital and improve its financial flexibility. Cablevision reiterated that it plans to reach positive free cash flow next year.

Cablevision Chairman Charles Dolan will be chairman of the new company, but there will be no other directors or officers overlapping between Cablevision and the new entity, Cablevision. The spinoff remains contingent on regulatory approvals and final Cablevision board clearance.

Cablevision shares, which late last year sank into the low single digits as the company struggled with stagnating basic cable subscription numbers and a liquidity squeeze, have been on the rise since last fall. With the company shedding noncore assets and cutting costs, Cablevision has more than quadrupled off its lows. The stock rose $2.83 to $22.19 Monday.

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