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The Associated Press June 1, 2010, 11:51AM ET

Mediacom Communications CEO offers to buy company

Mediacom Communications Corp. said Tuesday that its founder and CEO, Rocco Commisso, has offered to acquire all the company's shares that he doesn't already own for about $245 million, and take the television cable company private.

Commisso, who also serves as Mediacom's chairman, said in a letter to Mediacom's board that he currently owns about 40 percent of the company's common stock, representing 87 percent of the voting power.

Commisso is offering to pay $6 in cash for each of the company's Class A and Class B shares that he doesn't already own. The price represents a premium of nearly 13 percent from the stock's $5.33 closing price on Friday. Shares were not traded Monday because of the Memorial Day holiday. The stock has traded in a 52-week range of $3.85 to $7.30.

In midday trading, shares of Mediacom jumped 82 cents, or 15 percent, to $6.15, just above the offering price, signaling investor confidence that the deal would go through.

The company listed a total of about 68 million Class A and Class B shares outstanding as of April 22 in a recent regulatory filing. With Commisso owning about 40 percent of those shares, his offer to buy up the additional shares at $6 apiece represents an offer of about $245 million.

Commisso said he would finance the transaction through borrowing under the company's existing credit agreements.

Mediacom said its board appointed independent directors Thomas Reifenheiser and Natale Ricciardi to a special committee to consider Commisso's proposal. The panel will retain independent advisers and legal counsel.

The company said in a news release that its board and the special panel have just received the proposal, and no decisions have been made on the company's response. There's no assurance any transaction will be consummated, the company said.

Mediacom said its expects the proposal will not affect day-to-day operations, and the company doesn't intend to comment further for now.

In his letter to the board, Commisso said his proposal "offers compelling value and is in the best interests of the company and all of its public shareholders." He said he was only interested in his offer, and is "not interested in selling my stake in the company or considering any strategic transaction involving the company."

He said he was prepared to move "very quickly" to negotiate a transaction.

Before he made his offer, Mediacom had scheduled its annual shareholders meeting for June 22 in New York City.

Commisso said he plans to continue in his current leadership roles at the company after the proposed transaction.

Mediacom, based in Middletown, says it is the nation's seventh-largest cable television company based on the number of basic video subscribers. Its services are concentrated in the Midwest and South. It also provides broadband services.

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