Cablevision had announced last month that it would consider spinning off Rainbow Media to its shareholders as a separate company. Now the Cablevision board of directors has given the green light to move forward on the spin-off.
Cablevision said the spin-off would be structured as a tax-free pro rata distribution to stockholders and is expected to be completed by mid-year 2011, subject to necessary approvals. As part of the leveraged spin-off, a refinancing of what will be the new Rainbow would create new debt, a portion of which would be used to repay approximately $1.25 billion of Cablevision debt.
The new Rainbow’s assets will include:
– National programming networks: AMC, WE tv, IFC, Sundance Channel and Wedding Central
– IFC Entertainment, an independent film business that consists of multiple brands — including IFC Films, IFC Productions and the IFC Center
– Rainbow Network Communications, a full service network programming origination and distribution company, delivering programming to the cable, satellite and broadcast industries
Businesses that will remain a part of Cablevision include the cable and telecommunications businesses, Newsday, News 12 Networks, MSG Varsity and Clearview Cinemas.
“We are moving forward with the spin-off of Rainbow from Cablevision, which will create two distinct companies — one led predominantly by a premiere cable business and another that houses an attractive portfolio of successful programming assets. We believe this will provide both Cablevision and Rainbow with greater flexibility to freely pursue their own strategic objectives and individual business plans, while allowing investors to more clearly evaluate each of the separate companies’ assets and future potential,” said Cablevision President and CEO James Dolan.
Cablevision reiterated that it is not considering the sale of Rainbow or its cable and telecommunications business to anyone else.