* CEO says terminated discussions with special board panel
* Says has no interest in selling his shares
* Shares drop as much as 20 pct
(Adds analyst comments, background, updates shares)
By Manasi Phadke
BANGALORE, Aug 31 Mediacom Communications Corp
MCCC.O founder and chief executive withdrew his offer to take
the cable television operator private after a special board
committee rejected his sweetened bid.
Shares of the Middletown, New York-based company slumped as
much as 20 percent to $5.50, below CEO Rocco Commisso's initial
offer of $6 per share in May. [ID:nSGE6500FE]
Analysts said the board might have rejected the bid on
valuation as it expects the stock price to appreciate on the
back of increased cash flow due to recent cuts in capital
Cable companies had cut back on capital expenditure to
survive the prolonged downturn in the U.S. economy.
Gabelli & Co analyst Christopher Marangi said Commisso's
offer for Mediacom was below other recent transactions and that
the company was worth much more than $6 a share, or 6.6 times
In June, fifth-largest U.S. cable operator Cablevision
Systems Corp CVC.N agreed to buy peer Bresnan Communications
for $1.37 billion, which valued the company at 8.5 times
Marangi, who believes that Commisso will continue as the
CEO despite the failed bid, said the possibility of another bid
at some point in the future could not be ruled out.
Commisso, who founded Mediacom in 1995, currently has 87.2
percent of the voting power and owns about 40 percent of the
total shares outstanding, according to the company's most
recent regulatory filing.
The CEO said he terminated discussions with the special
committee and reiterated that he does not intend to sell his
"I am very disappointed with the highly unusual process and
ground rules established by the special committee and its
financial and legal advisers to evaluate my proposal," Commisso
said in a statement, without revealing his latest offer.
Mediacom competes with companies such as DirecTV Inc
DTV.O and Dish Network Corp (DISH.O) in smaller cities in
mid-west and south-east regions of United States.
The stock, which had gained 29 percent since Commisso made
his offer public, was trading down 13 percent at $5.94 in
afternoon trade, making it one of the top 10 percentage losers
(Reporting by Manasi Phadke in Bangalore; Editing by