Street Scrutinizes Newest VOOM Deal (SkyREPORT) 03.09.05
source: http://www.mbc-thebridge.com/
Street Scrutinizes Newest VOOM Deal (SkyREPORT) 03.09.05l
(SkyREPORT) Some on Wall Street said this week's deal involving Cablevision, its Chairman Charles Dolan and the company's struggling satellite TV service is still unclear, though it appears to be heading towards a resolution.
This week, Cablevision gave Dolan and his son Tom Dolan until the end of the month to finalize a separation of the satellite TV service from the cable company. The move comes after Cablevision threatened to shut down VOOM, only to postpone that effort when Charles Dolan appointed new members to the Cablevision board.
Said Tom Eagan of Oppenheimer and Co., "While uncertainty continues regarding VOOM's final structure, Chairman Charles Dolan's personal funding of VOOM's operations until he seeks alternative financing is, in our view, a step toward the final deconsolidation of VOOM from Cablevision."
Craig Moffett of Bernstein Research said this week's VOOM announcement does little to clear the uncertainty surrounding the future of the satellite TV service and the cable operator. He said the extention could give the Dolans more time to negotiate a deal with EchoStar, which signed an agreement in January with Cablevision to acquire VOOM's only satellite, Rainbow 1.
"We believe it is likely that the Dolans have determined that the VOOM service is only feasible with continued access to the Rainbow I satellite," Moffett said. "That leaves Charlie Ergen (EchoStar CEO) holding all the cards. The range of possible solutions includes buying the satellite back from EchoStar, leasing capacity from EchoStar once it has bought the satellite, or a joint venture between the companies."
Richard Greenfield said that if the Dolans acquire VOOM privately, "we believe he will need to sell Cablevision to fund VOOM."
The analyst pointed out that new Cablevision board members are experts in media transactions, especially cable system deals. "While our target price remains $33, we believe an auction could yield $35-$40 assuming Time Warner, Comcast and private equity players all bid," Greenfield said.
source: http://www.mbc-thebridge.com/
Street Scrutinizes Newest VOOM Deal (SkyREPORT) 03.09.05l
(SkyREPORT) Some on Wall Street said this week's deal involving Cablevision, its Chairman Charles Dolan and the company's struggling satellite TV service is still unclear, though it appears to be heading towards a resolution.
This week, Cablevision gave Dolan and his son Tom Dolan until the end of the month to finalize a separation of the satellite TV service from the cable company. The move comes after Cablevision threatened to shut down VOOM, only to postpone that effort when Charles Dolan appointed new members to the Cablevision board.
Said Tom Eagan of Oppenheimer and Co., "While uncertainty continues regarding VOOM's final structure, Chairman Charles Dolan's personal funding of VOOM's operations until he seeks alternative financing is, in our view, a step toward the final deconsolidation of VOOM from Cablevision."
Craig Moffett of Bernstein Research said this week's VOOM announcement does little to clear the uncertainty surrounding the future of the satellite TV service and the cable operator. He said the extention could give the Dolans more time to negotiate a deal with EchoStar, which signed an agreement in January with Cablevision to acquire VOOM's only satellite, Rainbow 1.
"We believe it is likely that the Dolans have determined that the VOOM service is only feasible with continued access to the Rainbow I satellite," Moffett said. "That leaves Charlie Ergen (EchoStar CEO) holding all the cards. The range of possible solutions includes buying the satellite back from EchoStar, leasing capacity from EchoStar once it has bought the satellite, or a joint venture between the companies."
Richard Greenfield said that if the Dolans acquire VOOM privately, "we believe he will need to sell Cablevision to fund VOOM."
The analyst pointed out that new Cablevision board members are experts in media transactions, especially cable system deals. "While our target price remains $33, we believe an auction could yield $35-$40 assuming Time Warner, Comcast and private equity players all bid," Greenfield said.
