WillDekkard
02-13-2010, 06:11 AM
Shaw buys control of Canwest Global
c/p by Dana Flavelle and John Spears
Calgary-based Shaw Communications Inc. has agreed to buy Canada’s second largest television network and related specialty channels out of bankruptcy protection, giving it access to enhanced content for its new mobile communications platform.
The deal, which requires further approvals, would give the cable TV distributor 80 per cent of the voting interest and at least 20 per cent of the equity interest in a Canwest Global Communications Corp.
Canwest owns the Global television network and various specialty TV channels, including stakes in Home and Garden Television.
Canwest’s newspaper chain, led by the National Post, is not part of this deal and remains in bankruptcy court protection.
Financial terms were not disclosed, but Canwest said last October it would require at least a $65 million equity injection to emerge from bankruptcy protection.
“When we filed for creditor protection, we announced that in order to proceed with the recapitalization plan, we would require a new Canadian equity investment of at least $65 million,” Canwest spokesman John Douglas said.
The Shaw deal will fill that need, he said. The exact worth of the investment won’t be revealed until next week, however.
Douglas said creditors will be offered a “compromised rate” for their claims, but wouldn’t say what it is
The deal gives Shaw more control over future content as it moves into new distribution channels, such as mobile phones, said Iain Grant, a principal in the Seabord Group, a Canadian consulting company.
While other potential bidders for Canwest included CTV globemedia Inc., Quebecor Inc. and Rogers Communications Inc., “the one for whom it made the most sense is Shaw,” Grant said.
“We are excited about the investment and gaining effective control of one of the premier
broadcasters and owners of content in the Canadian broadcasting industry at a reasonable
valuation,” Jim Shaw, chief executive officer and vice chair of Shaw Communications, said in a statement.
“We believe that Shaw’s investment results in a number of benefits to the broadcasting system, including an ability to strengthen local programming, ensure the ongoing viability of the second largest private conventional television network in Canada, and sustain a dynamic and competitive television market.”
The deal has the support of certain 8 per cent senior subordinated note holders, but must still be approved by other creditors, as well as the Ontario court overseeing the bankruptcy process, and the CRTC, Canada’s broadcast regulator.
The process will probably take until mid-August to complete, Douglas said. Once those hurdles are cleared, the Shaw investment will take place
Shaw said Canwest would operate as a separate private company with a dedicated management team and board of directors.
Shaw can increase its ownership in the future and may acquire more than 20 per cent depending on how many creditors opt for cash rather than shares in the restructure company.
end of c/p
c/p by Dana Flavelle and John Spears
Calgary-based Shaw Communications Inc. has agreed to buy Canada’s second largest television network and related specialty channels out of bankruptcy protection, giving it access to enhanced content for its new mobile communications platform.
The deal, which requires further approvals, would give the cable TV distributor 80 per cent of the voting interest and at least 20 per cent of the equity interest in a Canwest Global Communications Corp.
Canwest owns the Global television network and various specialty TV channels, including stakes in Home and Garden Television.
Canwest’s newspaper chain, led by the National Post, is not part of this deal and remains in bankruptcy court protection.
Financial terms were not disclosed, but Canwest said last October it would require at least a $65 million equity injection to emerge from bankruptcy protection.
“When we filed for creditor protection, we announced that in order to proceed with the recapitalization plan, we would require a new Canadian equity investment of at least $65 million,” Canwest spokesman John Douglas said.
The Shaw deal will fill that need, he said. The exact worth of the investment won’t be revealed until next week, however.
Douglas said creditors will be offered a “compromised rate” for their claims, but wouldn’t say what it is
The deal gives Shaw more control over future content as it moves into new distribution channels, such as mobile phones, said Iain Grant, a principal in the Seabord Group, a Canadian consulting company.
While other potential bidders for Canwest included CTV globemedia Inc., Quebecor Inc. and Rogers Communications Inc., “the one for whom it made the most sense is Shaw,” Grant said.
“We are excited about the investment and gaining effective control of one of the premier
broadcasters and owners of content in the Canadian broadcasting industry at a reasonable
valuation,” Jim Shaw, chief executive officer and vice chair of Shaw Communications, said in a statement.
“We believe that Shaw’s investment results in a number of benefits to the broadcasting system, including an ability to strengthen local programming, ensure the ongoing viability of the second largest private conventional television network in Canada, and sustain a dynamic and competitive television market.”
The deal has the support of certain 8 per cent senior subordinated note holders, but must still be approved by other creditors, as well as the Ontario court overseeing the bankruptcy process, and the CRTC, Canada’s broadcast regulator.
The process will probably take until mid-August to complete, Douglas said. Once those hurdles are cleared, the Shaw investment will take place
Shaw said Canwest would operate as a separate private company with a dedicated management team and board of directors.
Shaw can increase its ownership in the future and may acquire more than 20 per cent depending on how many creditors opt for cash rather than shares in the restructure company.
end of c/p