Last month Mediacom Communications Corp. entered into a definitive merger agreement with Rocco B. Commisso, the corporation's founder, chairman and chief executive officer, and JMC Communications LLC, which Commission created.
Mediacom is the nation's eighth largest television company and a leading cable operator in smaller markets. It also offers digital, Internet and phone services.
The agreement calls for Commisso to buy the outstanding shares at $8.75 each, for a reported total price tag of $600 million.
“This is simply a transaction that moves the ownership of company stock from one set of hands to another, and our chief executive officer has been the majority owner since he founded the company,” Lake County's local Mediacom manager, Shawn Swatosh, told Lake County News.
“Most importantly, this transaction will have no impact on our day to day operations and should be transparent to customers,” he said.
Swatosh noted that Commisso told employees in a recent memorandum, “Mediacom customers are the absolute, number one priority for all of us, and we will strive to continue to provide them with great customer service and the very best products and services.”
Swatosh added, “In other words, operations will continue in the direction previously set as we work to bring faster broadband speeds and more advanced digital products to all areas with Mediacom service.”
The merger will be on the Clearlake City Council's consent agenda for approval on Thursday.
A report from City Clerk Melissa Swanson to the council explained that the merger won't affect the city's franchise agreement with Mediacom, but the agreement does require the council's formal approval.
Swanson's report said that when Mediacom purchased Jones Intercable in 1998, Commisso was Mediacom's sole owner and operator. He took Mediacom public with an initial public officer in 2000.
In May Commisso made a “going private” proposal to the corporation which originally would have bought all shares not in his possession for $6 each, the company reported.
The corporation reported that its board of directors of Mediacom, acting upon the unanimous recommendation of a special committee of independent directors formed to examine the proposal, unanimously approved the merger agreement with the higher buyout price.
The purchase comes as Mediacom posted strong third quarter financials this year, showing a 3-percent increase in revenues, which totaled $374.4 million.
The revenue increase was attributed largely to continued growth in high-speed data and, to a lesser extent, advertising and phone revenues, offset in part by lower video revenues.
The corporation said the average total monthly revenue per basic subscriber rose 8.4. percent to $103.17.
Video revenues declined 1.1 percent, primarily due to a lower number of basic subscribers, which Mediacom said was mostly offset by video rate increases and higher revenues from our digital video, digital video recorder and high-definition television services.
Mediacom reported losing 13,000 basic subscribers, compared to a loss of 19,000 in the prior year's third quarter.
At the same time, the corporation added 12,000 digital customers to end the quarter with 717,000, a 59.6 percent penetration of basic subscribers. Over the year, there was a 7.8-percent growth rate, totaling 52,000 new digital customers.
From the third quarter of 2009 to 2010, Mediacom gained 62,000 high-speed customers – 13,000 over 2010's third quarter alone – to end with 827,000 high speed customers. In addition, it added 50,000 phone customers over the year for a total at quarter's end of 324,000.
The corporation's advertising revenues in the third quarter were up 18.8 percent, which it primarily attributed due to increased national and local sales, with significant contributions from the political and automotive categories.
E-mail Elizabeth Larson at
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