Shares in Cablevision Systems posted sharp gains today after the Dolan family, the US regional cable operator's controlling shareholders, bid $7.9 billion in cash to take the company private.

Analysts said a revamped approach stands a good chance of success, but added the family may have to raise its offer to win board approval.

Shares in Cablevision, which also owns the New York Knicks basketball team and Madison Square Garden, added $2.66, or 11 per cent, to $26.59 in morning trading on the New York Stock Exchange.

The Dolan offer, the second from the family in 16 months, is worth $27 a share, a 13 per cent premium to the stock’s closing price of $23.93 on Friday

The family offered $21 a share for the cable operations in June 2005 in a move that would have separated the media assets into a stand-alone company.

There has been speculation that Time Warner's cable unit, which operates next to Cablevision’s suburban New York territory, would be interested in buying the group's cable assets.

The Dolans already own 22.5 per cent of the company but control 74 per cent of votes.

Including a $10 special dividend paid in April, the deal is worth about $37 per share. The Dolans would assume about $11.3 billion in debt.

Cablevision was recently dragged into the stock option scandal sweeping the US when the company disclosed that it had awarded lucrative options to a dead vice-chairman and made it appear that he was alive.

In a US Securities and Exchange Commission (SEC) filing, America’s fifth-largest cable operator acknowledged that an unidentified executive — known to be Marc Lustgarten, the former vice-chairman — died "after the stated grant date of the award and before the actual grant date".

Cablevision’s stock option woes surfaced as the company revealed restated profits for the previous three years and the first quarter of this year because of the discrepancies relating to the timing of the option grants. The company also reported that profit fell to $14.6 million (£7.7 million) in the second quarter, or 5 cents a share, from $213.8 million, or 74 cents a share, the year before, when Cablevision recorded an after-tax gain of $265 million.

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