* Says offer from CEO Rocco Commisso
* Offer at 13 pct premium
* Shares rise 17 pct
(Adds analyst's comments, details; updates share movement)
By Saqib Iqbal Ahmed
BANGALORE, June 1 Mediacom Communications Corp
MCCC.O said Chief Executive Rocco Commisso has offered to
take the cable television system operator private at $6 a
share, a premium of 13 percent to the stock's Friday closing
Commisso, the CEO and chairman who founded Mediacom in
1995, intends to buy all outstanding Class A and Class B common
stock, not already beneficially owned by him.
Shares of Mediacom rose as much as 17 percent to trade at
$6.24 in morning trade breaching Commisso's offer price.
"We believe $9 or $10 to be a much more defensible bid;
however, we believe it is highly unlikely Commisso will be able
to raise to these levels," Pivotal Research Group analyst
Jeffrey Wlodarczak said in a note.
Miller Tabak & Co analyst David Joyce said, who has an $8
target on Mediacom stock, said it is worth "far more than
Joyce, however, does not see any rival bids in the offing.
"The chairman controls the company. It's pretty much up to
him what happens," he said.
Commisso currently beneficially owns 87.2 percent of
aggregate voting power of class A and class B shares of
Mediacom, according to a filing with the U.S. Securities and
Commisso said he will continue in his current roles at
Mediacom and is not interested in selling his stake in the
Mediacom, which targets smaller cities in the United States
and caters to customers mainly in the Midwestern and
Southeastern regions, had about 68.1 million shares of class A
and B outstanding as of April 30.
The proposed transaction will not result in a change of
control of existing debt arrangements, the company said.
For the first quarter ended March 31, Mediacom had total
debt outstanding of $3.36 billion.
Commisso expects to finance the transaction through
borrowings under the company's existing credit facilities.
"It appears at this level the company has the ability to
comfortably fund the offer within its existing credit
facility," Pivotal Research Group's Wlodarczak said.
The offer has just been received and no decision has been
made with respect to Mediacom' response to the proposal, the
company said. A special committee of independent directors has
been formed to respond to Commisso's offer.
The company, which offers broadband products and services,
has a market cap of $363.1 million, according to Thomson
Shares of Middletown, New York-based Mediacom were up 15
percent at $6.15 in late morning trade Tuesday on Nasdaq.
(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Don