Nov 30, 2020
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Alliance Atlantis possible sale

TORONTO (CP) _ Alliance Atlantis Communications Inc., one of Canada’s largest TV entertainment companies, said Friday it’s in talks about a potential sale while Goldman Sachs & Co. and CanWest Global Communications Corp. (TSX:CGS) were reported to have teamed up on an offer.

Alliance said in a release that controlling shareholder Southhill Strategy Inc., owned by Alliance executive chairman Michael MacMillan and Seaton McLean, "is also participating in those discussions.

"There can be no assurance that these discussions will result in a definitive agreement."

The announcement comes after months of rumours that CanWest has been eyeing Alliance, a company best known for its 50 per cent interest in the lucrative "CSI" crime-drama TV franchise. The firm was formally put up for sale in December. Alliance reached a record high of $51.82 Friday morning on the Toronto Stock Exchange after reports of a possible offer. The company closed up $1.22 to $51.20 while CanWest shares rose three cents to $10.74.

Shares in Alliance have climbed steadily since last August on a possible sale. In mid-December the company’s shares rose more than 19 per cent over a week fuelled by analyst reports that predicted an Alliance could be up for grabs soon. On Friday, reports surfaced saying that CanWest and Goldman formed a partnership that would see the Canadian media company buy Alliance’s 13 specialty television channels.

Goldman’s private-equity group is considering either an outright purchase of Alliance’s 50 per cent interest in the lucrative "CSI" crime-drama TV franchise, or a loan to CanWest backed by the "CSI" stake, reports said. Alliance’s rights in the franchise include international distribution for all three series, which has proven to be a major revenue driver for the company.

Together CanWest and Goldman could offer up to C$2.1 billion for Alliance, media reports said. CanWest and Goldman declined to comment Friday. Analysts have said CanWest could shed its Network Ten broadcasting assets in Australia and New Zealand, in which it owns a 56.4 per cent stake, in favour of expanding its television holdings in Canada.

In an investor report released Jan. 3, Westwind Partners analyst Ben Mogil suggested those properties could see a sale or merger by the fall. He said CanWest’s New Zealand operations reported three per cent growth in earnings to NZ$24.3 million, before interest and taxes, in the first quarter. But that translated to a 2.5 per cent decline when converted to Canadian dollars.

The company has also had trouble with its newspaper assets amidst lagging sales across the industry, and shuttered the print version of free daily Dose last year. Analyst estimates previously pegged Alliance’s specialty TV channel division, which includes Showcase and History Television, to be worth up to $1.5 billion.

"CSI" is co-owned by CBS Corp. and is harder to value, but is likely worth between $700 million and $800 million.

In December CBS was rumoured to be interested in snagging the other half of the CSI interests to develop the franchise outside of North America.

Winnipeg-based CanWest and the New York investment bank are not expected to be the only bidders. Astral Media Inc. (TSX:ACM.A) and Corus Entertainment Inc. (TSX:CJR.B) are also preparing bids, sources say, and cable rivals such as Rogers Communications Inc. (TSX:RCI.B) and Quebecor Inc. (TSX:QBR.A) are seen as outside contenders.

Alliance also holds a 51 per cent stake in publicly traded income trust Motion Picture Distribution LP (TSX:FLM.UN). Its portion is worth C$166 million.

Adam Shine, an analyst for National Bank Financial, said in an investors note that while Alliance might prefer to sell the entire company to a single party, he’s "not convinced that they optimize the value of each distinct asset in the process."

He said Goldman would likely acquire Motion Picture Distribution and possibly the stake in "CSI."

Alliance’s announcement ignited criticism from the vice-president of Canada’s largest media union, who called it part of "the dangerous pyramiding of media ownership concentration."

Peter Murdoch, media vice-president of the Communications, Energy and Paperworkers Union of Canada, said he is asking the prime minister and the federal heritage minister to warn large media conglomerates that they’re asking for a tough reaction if they continue to buy each other and create increasingly large companies.

"It is incumbent on Heritage Minster Bev Oda to speak directly to the issue now, before the bidding war gets seriously engaged," Murdoch said.

"Canada already has the dubious reputation of being a world leader in concentrated media."

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Headline, Industry News

Alliance Atlantis possible sale

TORONTO (CP) _ Alliance Atlantis Communications Inc., one of Canada’s largest TV entertainment companies, said Friday it’s in talks about a potential sale while Goldman Sachs & Co. and CanWest Global Communications Corp. (TSX:CGS) were reported to have teamed up on an offer.

Alliance said in a release that controlling shareholder Southhill Strategy Inc., owned by Alliance executive chairman Michael MacMillan and Seaton McLean, "is also participating in those discussions.

"There can be no assurance that these discussions will result in a definitive agreement."

The announcement comes after months of rumours that CanWest has been eyeing Alliance, a company best known for its 50 per cent interest in the lucrative "CSI" crime-drama TV franchise. The firm was formally put up for sale in December. Alliance reached a record high of $51.82 Friday morning on the Toronto Stock Exchange after reports of a possible offer. The company closed up $1.22 to $51.20 while CanWest shares rose three cents to $10.74.

Shares in Alliance have climbed steadily since last August on a possible sale. In mid-December the company’s shares rose more than 19 per cent over a week fuelled by analyst reports that predicted an Alliance could be up for grabs soon. On Friday, reports surfaced saying that CanWest and Goldman formed a partnership that would see the Canadian media company buy Alliance’s 13 specialty television channels.

Goldman’s private-equity group is considering either an outright purchase of Alliance’s 50 per cent interest in the lucrative "CSI" crime-drama TV franchise, or a loan to CanWest backed by the "CSI" stake, reports said. Alliance’s rights in the franchise include international distribution for all three series, which has proven to be a major revenue driver for the company.

Together CanWest and Goldman could offer up to C$2.1 billion for Alliance, media reports said. CanWest and Goldman declined to comment Friday. Analysts have said CanWest could shed its Network Ten broadcasting assets in Australia and New Zealand, in which it owns a 56.4 per cent stake, in favour of expanding its television holdings in Canada.

In an investor report released Jan. 3, Westwind Partners analyst Ben Mogil suggested those properties could see a sale or merger by the fall. He said CanWest’s New Zealand operations reported three per cent growth in earnings to NZ$24.3 million, before interest and taxes, in the first quarter. But that translated to a 2.5 per cent decline when converted to Canadian dollars.

The company has also had trouble with its newspaper assets amidst lagging sales across the industry, and shuttered the print version of free daily Dose last year. Analyst estimates previously pegged Alliance’s specialty TV channel division, which includes Showcase and History Television, to be worth up to $1.5 billion.

"CSI" is co-owned by CBS Corp. and is harder to value, but is likely worth between $700 million and $800 million.

In December CBS was rumoured to be interested in snagging the other half of the CSI interests to develop the franchise outside of North America.

Winnipeg-based CanWest and the New York investment bank are not expected to be the only bidders. Astral Media Inc. (TSX:ACM.A) and Corus Entertainment Inc. (TSX:CJR.B) are also preparing bids, sources say, and cable rivals such as Rogers Communications Inc. (TSX:RCI.B) and Quebecor Inc. (TSX:QBR.A) are seen as outside contenders.

Alliance also holds a 51 per cent stake in publicly traded income trust Motion Picture Distribution LP (TSX:FLM.UN). Its portion is worth C$166 million.

Adam Shine, an analyst for National Bank Financial, said in an investors note that while Alliance might prefer to sell the entire company to a single party, he’s "not convinced that they optimize the value of each distinct asset in the process."

He said Goldman would likely acquire Motion Picture Distribution and possibly the stake in "CSI."

Alliance’s announcement ignited criticism from the vice-president of Canada’s largest media union, who called it part of "the dangerous pyramiding of media ownership concentration."

Peter Murdoch, media vice-president of the Communications, Energy and Paperworkers Union of Canada, said he is asking the prime minister and the federal heritage minister to warn large media conglomerates that they’re asking for a tough reaction if they continue to buy each other and create increasingly large companies.

"It is incumbent on Heritage Minster Bev Oda to speak directly to the issue now, before the bidding war gets seriously engaged," Murdoch said.

"Canada already has the dubious reputation of being a world leader in concentrated media."

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Your email address will not be published. Required fields are marked *

Headline, Industry News

Alliance Atlantis possible sale

TORONTO (CP) _ Alliance Atlantis Communications Inc., one of Canada’s largest TV entertainment companies, said Friday it’s in talks about a potential sale while Goldman Sachs & Co. and CanWest Global Communications Corp. (TSX:CGS) were reported to have teamed up on an offer.

Alliance said in a release that controlling shareholder Southhill Strategy Inc., owned by Alliance executive chairman Michael MacMillan and Seaton McLean, "is also participating in those discussions.

"There can be no assurance that these discussions will result in a definitive agreement."

The announcement comes after months of rumours that CanWest has been eyeing Alliance, a company best known for its 50 per cent interest in the lucrative "CSI" crime-drama TV franchise. The firm was formally put up for sale in December. Alliance reached a record high of $51.82 Friday morning on the Toronto Stock Exchange after reports of a possible offer. The company closed up $1.22 to $51.20 while CanWest shares rose three cents to $10.74.

Shares in Alliance have climbed steadily since last August on a possible sale. In mid-December the company’s shares rose more than 19 per cent over a week fuelled by analyst reports that predicted an Alliance could be up for grabs soon. On Friday, reports surfaced saying that CanWest and Goldman formed a partnership that would see the Canadian media company buy Alliance’s 13 specialty television channels.

Goldman’s private-equity group is considering either an outright purchase of Alliance’s 50 per cent interest in the lucrative "CSI" crime-drama TV franchise, or a loan to CanWest backed by the "CSI" stake, reports said. Alliance’s rights in the franchise include international distribution for all three series, which has proven to be a major revenue driver for the company.

Together CanWest and Goldman could offer up to C$2.1 billion for Alliance, media reports said. CanWest and Goldman declined to comment Friday. Analysts have said CanWest could shed its Network Ten broadcasting assets in Australia and New Zealand, in which it owns a 56.4 per cent stake, in favour of expanding its television holdings in Canada.

In an investor report released Jan. 3, Westwind Partners analyst Ben Mogil suggested those properties could see a sale or merger by the fall. He said CanWest’s New Zealand operations reported three per cent growth in earnings to NZ$24.3 million, before interest and taxes, in the first quarter. But that translated to a 2.5 per cent decline when converted to Canadian dollars.

The company has also had trouble with its newspaper assets amidst lagging sales across the industry, and shuttered the print version of free daily Dose last year. Analyst estimates previously pegged Alliance’s specialty TV channel division, which includes Showcase and History Television, to be worth up to $1.5 billion.

"CSI" is co-owned by CBS Corp. and is harder to value, but is likely worth between $700 million and $800 million.

In December CBS was rumoured to be interested in snagging the other half of the CSI interests to develop the franchise outside of North America.

Winnipeg-based CanWest and the New York investment bank are not expected to be the only bidders. Astral Media Inc. (TSX:ACM.A) and Corus Entertainment Inc. (TSX:CJR.B) are also preparing bids, sources say, and cable rivals such as Rogers Communications Inc. (TSX:RCI.B) and Quebecor Inc. (TSX:QBR.A) are seen as outside contenders.

Alliance also holds a 51 per cent stake in publicly traded income trust Motion Picture Distribution LP (TSX:FLM.UN). Its portion is worth C$166 million.

Adam Shine, an analyst for National Bank Financial, said in an investors note that while Alliance might prefer to sell the entire company to a single party, he’s "not convinced that they optimize the value of each distinct asset in the process."

He said Goldman would likely acquire Motion Picture Distribution and possibly the stake in "CSI."

Alliance’s announcement ignited criticism from the vice-president of Canada’s largest media union, who called it part of "the dangerous pyramiding of media ownership concentration."

Peter Murdoch, media vice-president of the Communications, Energy and Paperworkers Union of Canada, said he is asking the prime minister and the federal heritage minister to warn large media conglomerates that they’re asking for a tough reaction if they continue to buy each other and create increasingly large companies.

"It is incumbent on Heritage Minster Bev Oda to speak directly to the issue now, before the bidding war gets seriously engaged," Murdoch said.

"Canada already has the dubious reputation of being a world leader in concentrated media."

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Your email address will not be published. Required fields are marked *

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