Dec 02, 2020
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$193M take over of MPD

TORONTO (CP) _ A nasty battle for control of Canada’s premier film distributor came to an end Tuesday with the announcement of a blockbuster deal worth about $193 million that will see a Canadian private equity firm take over.

Under the agreement, Movie Distribution Income Fund (TSX:FLM.UN) is selling its stake in Motion Picture Distribution LP to an alliance between EdgeStone Capital Partners and an affiliate of U.S.-based Goldman Sachs.

Fund unitholders will get $10 per unit as part of the agreement, tentatively set to close Aug. 7. Following a trading halt, the units jumped nine per cent on word of the deal to $9.97, an increase of 82 cents, in morning trading on the Toronto Stock Exchange.

"It’s great news for everyone, including all the employees, because any time you reduce the uncertainty, it’s good for the company," Lloyd Wiggins, chief financial officer of Movie Distribution Income Fund, told The Canadian Press.

"We feel and the trustees feel that it’s a very fair price for the unitholders and we’re very pleased with the result."

Besides being a leading distributor of movies in Canada, Motion Picture Distribution also has a presence in the United Kingdom and Spain. It has about 210 employees worldwide

Currently, the fund controls 49 per cent of the company, while Alliance Atlantis Communications Inc. (TSX: AAC.A, AAC.B) indirectly holds the other 51 per cent. However, Alliance is being sold for $2.3 billion to CanWest Global Communications Corp. (TSX:CGS) and Goldman Sachs.

"Obviously, there’ll be a new owner. We don’t know what their plans are," Wiggins said.

"It’s really an unknown at this point what their strategy is going to be."

Sam Duboc, president of EdgeStone, said in an interview. that there were no immediate plans for dramatic change in direction for Motion Picture Distribution once EdgeStone takes control.

"We like what the management is doing," Duboc said.

"It’s a wonderful Canadian treasure that we’re looking forward to keeping Canadian and continuing to build."

Duboc refused to indicate the size of Goldman Sachs’ equity stake in the company.

The takeover battle had been headed for Ontario Superior Court this week, with Movie Distribution set to appear at a fairness hearing for the Alliance deal and to argue the trust’s consent was required.

Amid fears the equity firm would lowball their offer, fund executives also complained they had been left in the dark while EdgeStone and New York-based Goldman Sachs discussed terms of their arrangement for the deal. Thursday’s looming court date helped focus discussions, Wiggins said.

"The court date was getting closer and as it gets closer, people start negotiating a bit more," Wiggins said.

"They just kept talking and talking. That was the key."

Fund shareholders will have to approve the deal at a special meeting set for Aug. 3. While two-thirds approval is needed, a handful of institutional investors who own about 30 per cent of the units have already indicated they like what they see.

The deal also needs the approval of Heritage Canada but there was no suggestion of concerns at this point, Wiggins said.

Rubin Osten, chairman of a special committee of the fund’s board, said trustees were happy to obtain "a liquidity alternative at fair value" for unitholders.

EdgeStone, one of Canada’s leading private equity firms, is a principal entity of the GMP Capital Trust group (TSX: GMP.UN).

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Headline, Industry News

$193M take over of MPD

TORONTO (CP) _ A nasty battle for control of Canada’s premier film distributor came to an end Tuesday with the announcement of a blockbuster deal worth about $193 million that will see a Canadian private equity firm take over.

Under the agreement, Movie Distribution Income Fund (TSX:FLM.UN) is selling its stake in Motion Picture Distribution LP to an alliance between EdgeStone Capital Partners and an affiliate of U.S.-based Goldman Sachs.

Fund unitholders will get $10 per unit as part of the agreement, tentatively set to close Aug. 7. Following a trading halt, the units jumped nine per cent on word of the deal to $9.97, an increase of 82 cents, in morning trading on the Toronto Stock Exchange.

"It’s great news for everyone, including all the employees, because any time you reduce the uncertainty, it’s good for the company," Lloyd Wiggins, chief financial officer of Movie Distribution Income Fund, told The Canadian Press.

"We feel and the trustees feel that it’s a very fair price for the unitholders and we’re very pleased with the result."

Besides being a leading distributor of movies in Canada, Motion Picture Distribution also has a presence in the United Kingdom and Spain. It has about 210 employees worldwide

Currently, the fund controls 49 per cent of the company, while Alliance Atlantis Communications Inc. (TSX: AAC.A, AAC.B) indirectly holds the other 51 per cent. However, Alliance is being sold for $2.3 billion to CanWest Global Communications Corp. (TSX:CGS) and Goldman Sachs.

"Obviously, there’ll be a new owner. We don’t know what their plans are," Wiggins said.

"It’s really an unknown at this point what their strategy is going to be."

Sam Duboc, president of EdgeStone, said in an interview. that there were no immediate plans for dramatic change in direction for Motion Picture Distribution once EdgeStone takes control.

"We like what the management is doing," Duboc said.

"It’s a wonderful Canadian treasure that we’re looking forward to keeping Canadian and continuing to build."

Duboc refused to indicate the size of Goldman Sachs’ equity stake in the company.

The takeover battle had been headed for Ontario Superior Court this week, with Movie Distribution set to appear at a fairness hearing for the Alliance deal and to argue the trust’s consent was required.

Amid fears the equity firm would lowball their offer, fund executives also complained they had been left in the dark while EdgeStone and New York-based Goldman Sachs discussed terms of their arrangement for the deal. Thursday’s looming court date helped focus discussions, Wiggins said.

"The court date was getting closer and as it gets closer, people start negotiating a bit more," Wiggins said.

"They just kept talking and talking. That was the key."

Fund shareholders will have to approve the deal at a special meeting set for Aug. 3. While two-thirds approval is needed, a handful of institutional investors who own about 30 per cent of the units have already indicated they like what they see.

The deal also needs the approval of Heritage Canada but there was no suggestion of concerns at this point, Wiggins said.

Rubin Osten, chairman of a special committee of the fund’s board, said trustees were happy to obtain "a liquidity alternative at fair value" for unitholders.

EdgeStone, one of Canada’s leading private equity firms, is a principal entity of the GMP Capital Trust group (TSX: GMP.UN).

Leave a Reply

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

Headline, Industry News

$193M take over of MPD

TORONTO (CP) _ A nasty battle for control of Canada’s premier film distributor came to an end Tuesday with the announcement of a blockbuster deal worth about $193 million that will see a Canadian private equity firm take over.

Under the agreement, Movie Distribution Income Fund (TSX:FLM.UN) is selling its stake in Motion Picture Distribution LP to an alliance between EdgeStone Capital Partners and an affiliate of U.S.-based Goldman Sachs.

Fund unitholders will get $10 per unit as part of the agreement, tentatively set to close Aug. 7. Following a trading halt, the units jumped nine per cent on word of the deal to $9.97, an increase of 82 cents, in morning trading on the Toronto Stock Exchange.

"It’s great news for everyone, including all the employees, because any time you reduce the uncertainty, it’s good for the company," Lloyd Wiggins, chief financial officer of Movie Distribution Income Fund, told The Canadian Press.

"We feel and the trustees feel that it’s a very fair price for the unitholders and we’re very pleased with the result."

Besides being a leading distributor of movies in Canada, Motion Picture Distribution also has a presence in the United Kingdom and Spain. It has about 210 employees worldwide

Currently, the fund controls 49 per cent of the company, while Alliance Atlantis Communications Inc. (TSX: AAC.A, AAC.B) indirectly holds the other 51 per cent. However, Alliance is being sold for $2.3 billion to CanWest Global Communications Corp. (TSX:CGS) and Goldman Sachs.

"Obviously, there’ll be a new owner. We don’t know what their plans are," Wiggins said.

"It’s really an unknown at this point what their strategy is going to be."

Sam Duboc, president of EdgeStone, said in an interview. that there were no immediate plans for dramatic change in direction for Motion Picture Distribution once EdgeStone takes control.

"We like what the management is doing," Duboc said.

"It’s a wonderful Canadian treasure that we’re looking forward to keeping Canadian and continuing to build."

Duboc refused to indicate the size of Goldman Sachs’ equity stake in the company.

The takeover battle had been headed for Ontario Superior Court this week, with Movie Distribution set to appear at a fairness hearing for the Alliance deal and to argue the trust’s consent was required.

Amid fears the equity firm would lowball their offer, fund executives also complained they had been left in the dark while EdgeStone and New York-based Goldman Sachs discussed terms of their arrangement for the deal. Thursday’s looming court date helped focus discussions, Wiggins said.

"The court date was getting closer and as it gets closer, people start negotiating a bit more," Wiggins said.

"They just kept talking and talking. That was the key."

Fund shareholders will have to approve the deal at a special meeting set for Aug. 3. While two-thirds approval is needed, a handful of institutional investors who own about 30 per cent of the units have already indicated they like what they see.

The deal also needs the approval of Heritage Canada but there was no suggestion of concerns at this point, Wiggins said.

Rubin Osten, chairman of a special committee of the fund’s board, said trustees were happy to obtain "a liquidity alternative at fair value" for unitholders.

EdgeStone, one of Canada’s leading private equity firms, is a principal entity of the GMP Capital Trust group (TSX: GMP.UN).

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

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