Cablevision Systems Corp., the New York-area cable-television provider, will spin off its Rainbow unit, which includes cable channels Sundance, IFC and AMC, the broadcaster of “Mad Men.”
The unit will be spun off to Cablevision’s shareholders as a “tax-free pro rata distribution,” the Bethpage, New York-based company said today in a statement. The plan calls for a completion of the transaction in mid-year 2011. Last month, the company announced its board was considering a spinoff.
The split lets Chief Executive Officer Jim Dolan focus on the company’s telecommunications operation, which accounted for 94 percent of its operating income last quarter. Cablevision spun off its Madison Square Garden unit and related sports networks earlier this year. Simplifying the business will help boost market value by separating units that depend on ad revenue and make it easier if the Dolan family decides to take the company private or sell it.
Cablevision said in the statement it isn’t considering the sale of Rainbow or its cable and telecommunications business.
Cablevision rose 3 cents to $34.72 at 4 p.m. in New York Stock Exchange composite trading. The stock had added 20 percent since the company announced it was considering a spinoff on Nov. 18.