Cablevision Plan Goes Sour

Updated from 11:40 a.m. EST

Shares of Cablevision (CVC Quote) got cheaper Friday after a last-ditch $8.9 billion buyout offer from the cable operator's controlling family disappointed investors.

The stock was recently down 81 cents, or 2.7%, to $28.79 after the Dolan family upped its bid for the cable operator to $30 a share, an increase of 11% over their October offer of $27 a share. The latest bid narrowly topped Thursday's closing price of $29.60.

Cablevision said midday Friday that it a special board committee plans to review the new proposal. It won't comment further on the offer.

The Dolan group -- led by led by Cablevision chairman and founder Charles Dolan and CEO James Dolan -- already owns 20% of the company, which owns New York's Madison Square Garden and three cable networks, among other properties. Investors had widely anticipated a higher bid, and now at least one analyst who expects the company to stay public smells a buying opportunity.

Richard Greenfield, an analyst with Pali Research, said in a research note Friday that he expects the special committee of the Cablevision board reviewing the offer to reject the bid. If Cablevision remains public, it could become a takeover target for competitors such as Time Warner's (TWX Quote) cable division, Greenfield believes.

"We continue to believe that Cablevision deserves a valuation premium to its industry peers based on its stronger earnings growth, more valuable underlying systems, and a strong likelihood of a Time Warner Cable takeover attempt over the next 12 to 18 months," wrote Greenfield.