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Cinram mulling possible sale
Friday November 10th 2006TORONTO (CP) _ Cinram International Income Fund (TSX:CRW.UN) is considering a possible sale, more acquisitions, unit repurchases and changes to its income trust structure and distribution policy as part of a new strategic review.
CEO Dave Rubenstein said Friday that an outright sale of the DVD and CD maker "is certainly not off the table," but "we do not intend at this time to solicit interest from prospective bidders."
Nevertheless, the fact that Cinram remains open to a potential sale appeared to be an about-face to its recent hardline stance.
In September, the fund’s board sparred publicly with its largest investor by refusing calls to put Cinram up for sale. At that time, Cinram’s board stated it had "no intention of selling, or exploring the possibility of selling" despite a call to do so by Amaranth Advisors, a U.S. investment fund that owns about 15 per cent of Cinram.
As for potential acquisitions, Rubenstein said Friday management continues to pursue "selected, tactical" opportunities.
"Several of these acquisition initiatives are progressing nicely," he told a conference call with analysts.
"However, from a timing standpoint, we do not anticipate making any announcements prior to the end of the year."
The Toronto-based fund is also considering moves such as a unit repurchase, which would likely boost its unit price, along with possible changes to its business structure and distribution policy in the wake of changes in federal tax rules for income trusts announced Oct. 31.
"In light of the government’s recent announcement regarding income trusts, which to date do not appear to directly impact Cinram, we need to evaluate the market valuation on income producing securities including any impact on Cinram’s expected valuation," Rubenstein said.
Cinram _ the world’s largest provider of pre-recorded music, video and software on DVDs and CDs _ announced the strategic review late Thursday as it reported weaker sales and profits in the third quarter. Lower DVD and CD sales cut revenue to US$477.2 million, compared with US$544.7 million a year earlier.
Earnings fell by nearly half to US$18.4 million, down from US$35.5 million. On a per unit basis, earnings declined to 32 cents from 62 cents. Cinram units were up 37 cents to C$22.15 Friday morning on the Toronto Stock Exchange.
Headline, Industry News
Cinram mulling possible sale
Friday November 10th 2006TORONTO (CP) _ Cinram International Income Fund (TSX:CRW.UN) is considering a possible sale, more acquisitions, unit repurchases and changes to its income trust structure and distribution policy as part of a new strategic review.
CEO Dave Rubenstein said Friday that an outright sale of the DVD and CD maker "is certainly not off the table," but "we do not intend at this time to solicit interest from prospective bidders."
Nevertheless, the fact that Cinram remains open to a potential sale appeared to be an about-face to its recent hardline stance.
In September, the fund’s board sparred publicly with its largest investor by refusing calls to put Cinram up for sale. At that time, Cinram’s board stated it had "no intention of selling, or exploring the possibility of selling" despite a call to do so by Amaranth Advisors, a U.S. investment fund that owns about 15 per cent of Cinram.
As for potential acquisitions, Rubenstein said Friday management continues to pursue "selected, tactical" opportunities.
"Several of these acquisition initiatives are progressing nicely," he told a conference call with analysts.
"However, from a timing standpoint, we do not anticipate making any announcements prior to the end of the year."
The Toronto-based fund is also considering moves such as a unit repurchase, which would likely boost its unit price, along with possible changes to its business structure and distribution policy in the wake of changes in federal tax rules for income trusts announced Oct. 31.
"In light of the government’s recent announcement regarding income trusts, which to date do not appear to directly impact Cinram, we need to evaluate the market valuation on income producing securities including any impact on Cinram’s expected valuation," Rubenstein said.
Cinram _ the world’s largest provider of pre-recorded music, video and software on DVDs and CDs _ announced the strategic review late Thursday as it reported weaker sales and profits in the third quarter. Lower DVD and CD sales cut revenue to US$477.2 million, compared with US$544.7 million a year earlier.
Earnings fell by nearly half to US$18.4 million, down from US$35.5 million. On a per unit basis, earnings declined to 32 cents from 62 cents. Cinram units were up 37 cents to C$22.15 Friday morning on the Toronto Stock Exchange.
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Headline, Industry News
Cinram mulling possible sale
Friday November 10th 2006TORONTO (CP) _ Cinram International Income Fund (TSX:CRW.UN) is considering a possible sale, more acquisitions, unit repurchases and changes to its income trust structure and distribution policy as part of a new strategic review.
CEO Dave Rubenstein said Friday that an outright sale of the DVD and CD maker "is certainly not off the table," but "we do not intend at this time to solicit interest from prospective bidders."
Nevertheless, the fact that Cinram remains open to a potential sale appeared to be an about-face to its recent hardline stance.
In September, the fund’s board sparred publicly with its largest investor by refusing calls to put Cinram up for sale. At that time, Cinram’s board stated it had "no intention of selling, or exploring the possibility of selling" despite a call to do so by Amaranth Advisors, a U.S. investment fund that owns about 15 per cent of Cinram.
As for potential acquisitions, Rubenstein said Friday management continues to pursue "selected, tactical" opportunities.
"Several of these acquisition initiatives are progressing nicely," he told a conference call with analysts.
"However, from a timing standpoint, we do not anticipate making any announcements prior to the end of the year."
The Toronto-based fund is also considering moves such as a unit repurchase, which would likely boost its unit price, along with possible changes to its business structure and distribution policy in the wake of changes in federal tax rules for income trusts announced Oct. 31.
"In light of the government’s recent announcement regarding income trusts, which to date do not appear to directly impact Cinram, we need to evaluate the market valuation on income producing securities including any impact on Cinram’s expected valuation," Rubenstein said.
Cinram _ the world’s largest provider of pre-recorded music, video and software on DVDs and CDs _ announced the strategic review late Thursday as it reported weaker sales and profits in the third quarter. Lower DVD and CD sales cut revenue to US$477.2 million, compared with US$544.7 million a year earlier.
Earnings fell by nearly half to US$18.4 million, down from US$35.5 million. On a per unit basis, earnings declined to 32 cents from 62 cents. Cinram units were up 37 cents to C$22.15 Friday morning on the Toronto Stock Exchange.
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