June 7 (Bloomberg) -- Mediacom Communications Corp., the cable-television provider in 1,500 U.S. cities, won approval of to pay more than $10.2 million to settle investor lawsuits challenging a buyout by the company’s top executive.
Delaware Chancery Court Judge Leo Strine Jr. yesterday approved the accord, which calls for Mediacom Chief Executive Officer Rocco B. Commisso to add 25 cents to his $8.75-a-share bid for the 60 percent of the company’s shares he didn’t already own, said Brian Long, a lawyer for the investors.
“We are pleased we were able to recover an additional $10 million for Mediacom shareholders,” Long said in an interview yesterday.
Commisso already owned 40 percent of Middletown, New York-based Mediacom’s Class A and Class B shares and had 87 percent voting control of the cable provider. He agreed to pay more than $600 million to buy out other shareholders and take the company private. He founded the firm in 1995 and took it public five years later.
Calvin Craib, a Mediacom spokesman, didn’t immediately return a call for comment today on the settlement.
Commisso, a former banker who specialized in lending to media and communications companies, first bid $6 a share for the company. The board rejected that offer.
He boosted the figure to $8.75 after shareholders sued in Delaware and New York, challenging the deal.
The executive later agreed to add a total of $3 a share to his initial offer and make additional disclosures about the buyout to resolve the suits in both states, Delaware court filings show.
Commisso won support for the buyout from holders of 97 percent of Mediacom’s outstanding shares in a March vote.
Strine also approved $3 million in legal fees and expenses for shareholder lawyers, to come out of the settlement fund, which exceeds $10.2 million, according to the filings.
Mediacom, which said in February that it’s the U.S.’s eighth-largest cable provider, is joining rivals such as Cox Communications Inc. in going private. Mediacom has about 1.2 million customers mostly in Iowa and Illinois.
The founding family of Cablevision Systems Corp., a New York-area cable provider, has been unsuccessful in two attempts in the past five years to buy out its public shareholders. Cox, the third-largest U.S. cable company, went private in 2004. Insight Communications Co. became private in 2008.
The case is In re Mediacom Communications Corp. Shareholders Litigation, Consolidated CA No. 5537, Delaware Chancery Court (Wilmington).
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