NEW YORK – Cablevision Systems Corp. (CVC), a Long Island-based cable TV company, on Monday said it would cancel a special $3 billion dividend after finding it had violated the terms of its bank borrowing agreement.
The company also said it would cancel a recently announced $1 billion bond offering.
Cablevision had announced the special one-time dividend for all shareholders in October after abandoning an effort to take the company private. The dividend would have resulted in a payout of about $690 million to the Dolan family, Cablevision's controlling shareholder, according to an estimate from Merrill Lynch.
The company did not provide details of the borrowing violations in a brief regulatory filing made Monday with the Securities and Exchange Commission, but it said that it did not believe the violations would affect its operations and that it had ample cash to meet its needs. The company also said it would make a complete review of all its lending agreements.
Investors sent Cablevision's shares down $1.34, or 5.6 percent, to $22.66 on the New York Stock Exchange.
The surprise announcement Monday marked the latest twist this year for Cablevision, which has been rocked by a feud between Charles Dolan, the company's chairman and founder, and James Dolan, his son and Cablevision's chief executive. That feud now appears to be settled, though both Dolans have declined repeated requests for comment.