Shaw Communications today proposed to acquire a controlling stake in Canwest Global Communications Corp., with an undisclosed investment intended to rid the debt-laden broadcaster of its creditors and emerge from creditor protection.
The proposed deal, which awaits creditor, court and CRTC approval, would see Shaw acquire at least 20% of Canwest’s equity and 80% of its voting stock.
Once completed, the transaction would hand Shaw control of Global Television, assorted specialty channels and other assets now under court supervision as Canwest Global completes its passage through creditor protection.
‘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,’ Shaw Communications CEO Jim Shaw said today in a statement.
The investment is certain to throw up concentration of ownership and other regulatory issues, given that Shaw Communications and broadcaster Corus Entertainment already share a common controlling shareholder. However, in a move calculated to secure CRTC approval, Shaw said a restructured Canwest will be run as a separate private company with its own management team and board of directors.
Reaction from the media community was mixed this morning.
‘It’s certainly a bit of a surprise,’ says Hugh Dow, chair, Mediabrands Canada. ‘It would seem to me that what it provides Shaw with is access to the Canwest content. And you think of the upside of the opportunities on things like video-on-demand, pay-per-view, mobile, it would certainly provide Shaw with access to that content, which is pretty strong. I would certainly imagine that that is a major factor and has been a real driver in all of this.
‘Obviously, this puts them in a major competitive position against Rogers, who have very similar delivery systems and are into the television content arena with their Citytv and other television holdings,’ he continues. ‘Shaw and Rogers are extremely competitive and determined to expand their businesses and this was obviously an opportunity for Shaw to do that.’
Helena Shelton, EVP, director trading and accountability, PHD, Toronto, told MiC this morning that the agency is pleased a viable offer has been put on the table. ‘We are happy that Canwest has an offer giving them a financially viable future, competition in Canadian broadcasting is welcome and needed,’ she says. ‘Although this is good news, there are still obstacles to clear with Goldman Sachs, followed by CRTC approval, before this is a done deal.’
Bruce Neve, president, Mediaedge:cia Canada, agrees.
‘I think it is great news,’ he comments. ‘It will ensure a strong and separate Canwest broadcasting group offering national, integrated media opportunities as opposed to having all the pieces picked over by the other media owners and reduced players in the market. Shaw is a dynamic, Canadian, maverick organization and will now have two separate and distinct media holdings in Corus and Canwest, as this is not a merger of the media companies.’
Sunni Boot also said she is pleased Shaw has made an offer on the company as a whole. ‘Shaw has proven to be excellent owners of broadcast properties. As a buyer we want more sellers and it wuld be our desire to have the Canwest properties and sales force remain seperate from Corus.’
With files from Playback Daily
