Cable operator Cox Communications (COX) says it has reached a deal under which majority shareholder Cox Enterprises will take the company private.
Cox Enterprises, the parent, says it will pay $34.75 per share in cash for the 38% of Cox Communications it doesn't already own, up from the
$32 per share it first offered Aug. 2. The bid set off a
short-lived rally in rivals such as
The new offer amounts to a 26% premium over Cox's closing price on July 30, the last day the stock traded before Cox Enterprises announced its original bid. Still, the latest offer undercuts Cox's 52-week high of $36.95.
Shares in cable operators have declined this year as investors fret about a variety of issues facing the industry. Those range from competition from satellite TV to concerns that operators will spend large on major acquisitions rather than funneling free cash flow to shareholders.
The transaction, which Cox says has been approved by both its board and a special committee of independent directors, is expected to result in a tender offer starting in two weeks. Cox Enterprises says it believes it can complete the deal by mid-December.
The two companies said that they have entered into memoranda of understanding with counsel for plaintiffs of pending shareholder suits, and that they expect to settle the litigation.
On news of the agreement, Cox's shares rose 20 cents Tuesday to $33.65.