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Cablevision Considering Spinoff, Paying Dividend

Cablevision Systems said Tuesday it would hire investment banks to help evaluate a spin off at least one of its businesses, among other strategies, including buying back stock or paying out dividends, sending shares up as much as 8 percent.

The statement comes just days after Chief Executive Jim Dolan suggested on an earnings call that the company may explore options to boost its share price.

Dolan's comments during the conference call caused several Wall Street analysts to upgrade their ratings on the stock or its price target, and lifted shares by as much as 35 percent in the last week.

In a statement, the company said its board authorized it to "take all actions necessary or desirable to evaluate and establish a policy with respect to regular quarterly dividends or stock buybacks as promptly as practicable" and "explore the spin-off of one or more businesses and other potential strategies."

Last October, the Dolan family offered to take Cablevision private for $36.26 a share, but the deal was rejected by shareholders, who deemed the price too low.

Analysts have continued to call for the company to look at ways to increase value, mentioning both aggressive stock buy backs and the possible spin off its cable network unit Rainbow Networks, which houses cable networks such as AMC and IFC.

Some also say Cablevision's shares have suffered partly because of what has been dubbed the 'Dolan Discount,' due to unexpected management decisions such as the company's purchase of the Long Island newspaper Newsday for $650 million in May.

Shares rose $1.57 to $27.53 in early trading, touching as high as $28 shortly after the opening bell.