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Cablevision Climbs as Board Mulls Options

The company will examine a spin-off of its businesses or a dividend payment.

Cablevision Systems


said Tuesday it will explore options to enhance value for its shareholders, which may include a spin-off of its businesses or a dividend payment.

The Bethpage, N.Y., cable company said its board of directors has authorized Cablevision's management to consider 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."

In addition to a possible quarterly dividend or stock buyback, the board authorized Cablevision to examine the spin-off of one or more divisions and "other potential strategies." In addition to its cable network, Cablevision also owns Rainbow Media, which consists of television stations AMC, WE tv and IFC, as well as Madison Square Garden.

Shares of Cablevision jumped $1.72, or 7.1%, to $26.

"We are highly confident of the strength of our underlying businesses and our operating performance," Cablevision President and Chief Executive James Dolan said in a statement. "As we indicated last week we have a strong desire to close the value gap between our operating performance and the market value of our shares and, therefore, we will be actively looking at options to accomplish that."

The announcement comes roughly nine months after the Dolan family's most recent failed attempt to take the cable operator private. In October, shareholders rejected a $10.6 billion offer by the Dolan group, which owns about 20% of the company. That bid valued shares at $36.26.

The first offer to take Cablevision private came in June 2005, when the Dolans offered $7.9 billion in a deal that would have paid stockholders $21 a share in cash, a 24% premium for Cablevision holders at the time. That offer called for Cablevision to spin off its media and entertainment properties into a separately traded Rainbow Media venture.

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In January 2007, a $30-a-share bid failed to win board approval.

Among its rivals


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, which reported better-than-expected subscriber growth last week, was lately up 1.4%.

Charter Communications

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, which

fell short of second-quarter revenue targets

Tuesday, was flat.