Cablevision founder and chief executive Jim Dolan (pictured) has caved in to the demands of major shareholders, agreeing to initiate quarterly dividends on the company's stocks.
The move comes after a group of investors, led by Mario Gabelli of Gamco Investors Inc, pressured the cable TV and media company to take action after concerns over the value of the company's share price.
Analysts believe the market value of Cablevision's common stock needs to be closer in line with the underlying operating performance of the company.
The principal concern raised by major stockholders was that the family-controlled company has had poor corporate governance, in particular a lack of communication with investors and the market.
The syndicate met with Dolan last week and suggested a series of measures, including dividend payments and stock buybacks. Cablevision has also considered spinning off one or more of its businesses.
Subsequently, Cablevision's board of directors declared a quarterly dividend of 10 cents per share on each outstanding share of both its NY Group Class A Stock and its NY Group Class B Stock. The quarterly dividend will be payable 18 September this year to shareholders of record at the close of business on August 26.
"Our strong performance and cash flow enable us to return value to shareholders through dividends," said Dolan.
"This action is a part of the process we have undertaken to enhance shareholder value as we continue to explore other options that we believe will help align the market value of the company's common stock with Cablevision's underlying operating performance."
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