NEW YORK (Reuters) - Cablevision Systems Corp CVC.N appeared to bow to pressure from investors when it said on Friday that its board had agreed to initiate a regular quarterly dividend.
The decision follows meetings earlier this week between Cablevision Chief Executive Jim Dolan and major stakeholders led by Mario Gabelli of Gamco Investors Inc (GBL.N), who have been pressuring the cable operator to make moves to boost the share price, including setting a dividend or buying back stock.
The New York company first said on July 31 that it would explore strategic options to close the gap between its intrinsic value and its market valuation. It will continue to look at other possible actions, Dolan said in a statement.
Major shareholders have said Cablevision, which is controlled by the Dolan family, has had poor corporate governance, particularly a lack of communication.
The decision by Cablevision to reach out to shareholders comes soon after activist investor Harbinger Capital said it had bought more than 11 million shares in the second quarter. The move makes it the fifth-largest external shareholder after Gabelli, ClearBridge Advisors (LM.N), T Rowe Price (TROW.O) and London-based Marathon Asset Management.
Harbinger Capital has built a reputation for forcing changes on the boards of media companies in which it buys stakes, as it did earlier this year at the New York Times Co (NYT.N) and Media General MEG.N.
Cablevision said it would pay 10 cents a share on its Class A and Class B stock starting on September 18 to shareholders of record at the close of business on August 26.
The company’s stock was down 20 cents at $31.11 in morning New York Stock Exchange trade.
Reporting by Yinka Adegoke, editing by Lisa Von Ahn