Tag Archives: CanWest

CanWest, Alliance investment rises to $262M

TORONTO (CP) _ CanWest Global Communications Corp. (TSX:CGS) is increasing its equity investment in the takeover of Alliance Atlantis Communications Inc. (TSX:AAC.B) to $262 million, up from the previously announced $200 million.

CanWest and Goldman Sachs said Tuesday they have completed details of their joint-venture agreement announced in January, and CanWest will hold a 36 per cent equity stake but two-thirds of the voting shares in the Alliance Atlantis specialty-channel assets.

The New York investment bank will have the other one-third of the voting shares and 64 per cent of the equity in the broadcasting joint venture.

As previously announced, CanWest will have no stake in the Alliance Atlantis entertainment and movie distribution businesses after the $53-per-share takeover. Goldman Sachs will take the Alliance Atlantis stake in the "CSI" TV crime-series franchise, and the Toronto company’s 51 per cent of Motion Picture Distribution LP is to be controlled by a Canadian partner of Goldman Sachs.

Tuesday’s announcement came a day after CanWest and Goldman, amid increasing turmoil in the corporate debt market, gave up on selling high-interest notes to support the $2.3-billion takeover and said a bank syndicate will provide financing.

The closing of the deal was postponed by eight days to Aug. 15 to finalize bank commitments.

The portion of the $2.3-billion overall price being allocated to the Alliance Atlantis broadcasting business is $1.5 billion. While CanWest contributes $262 million and Goldman Sachs puts up $472 million, their CW Investments Co. joint venture will take on $788 million in debt.

This will consist of a $475-million term loan and $313 million of bridge loans. There also will be a $50-million revolving credit facility which is not expected be immediately drawn upon.

These debt financings will be independent of CanWest and Goldman Sachs, with recourse only to CW Investments.

CanWest has undertaken to merge its Canadian television business, including the Global TV network, with the CW Investments group in 2011. The Winnipeg-based media conglomerate’s equity interest in the combined enterprise will be based on the profit performance and debt level of the businesses during the year ending March 31, 2011 _ not Dec. 31, 2010, as previously disclosed.

Assuming that the CW Investments debt on March 31, 2011, was still $788 million, CanWest’s equity interest would be 50 per cent if total earnings before interest, taxes, depreciation and amortization were $200 million in the year ending March 31, 2011.

CanWest’s stake would rise _ or fall _ by about five percentage points for each $50 million in combined EBITDA (earnings before interest, taxes, depreciation and amortization) above or below $200 million. It also would rise if debt were reduced or fall if debt increased.

CanWest and Goldman Sachs "have also agreed to certain put rights and call rights with respect to Goldman Sachs’ equity interests in CW Investments," the companies said.

If CanWest or CW Investments have not acquired all of the Goldman Sachs equity interest by the expiry of Goldman’s last put right in 2013, "then Goldman Sachs will be entitled to sell the CW Investments group, subject to a right of first offer in favour of CanWest, failing which Goldman Sachs will have the right to require CW Investments to effect an initial public offering."

CanWest CEO Peter Viner retires

WINNIPEG (CP) _ Peter Viner has retired as the president and CEO of CanWest MediaWorks Inc. after 33 years with the CanWest Global Communications Corp. (TSX:CGS) family of companies.

Viner joined CanWest in 1974 and was president and CEO of CanWest Global from 1997 until current CEO Leonard Asper took the helm of the company in 1999.

"We want to sincerely thank Pete for his passion and dedication to CanWest," Asper said Wednesday in a release.

"We are fortunate that we will continue to benefit from his experience and intellect through his ongoing involvement with CanWest."

A successor was not immediately announced and divisional operating heads previously reporting to him will now report directly to Asper.

Viner will continue to advise the company and will stay on as director of a number of CanWest subsidiaries.

The Toronto-based CanWest MediaWorks income fund was taken private by CanWest Global for $495 million last week. It formerly held a 26 per cent stake in Canada’s largest publisher of newspapers.

On the Toronto stock market Wednesday afternoon, CanWest Global shares gained seven cents to $9.16.

Heroes,’ ‘House’ back on Global this fall, but network launch marred by protest

TORONTO (CP) _ Colin Mochrie, Wendy Crewson and Gordon Pinsent were among several dozen performers who put a damper on Global’s splashy fall TV launch Wednesday, waving placards and yelling slogans outside a downtown theatre demanding that more homegrown series be put on television.

The noisy protest, organized by the performers union ACTRA, forced TV advertisers, media and other industry players to sidestep a picket line as they filed in to see Canadian and U.S. stars trumpet shows set to appear on the broadcaster’s fall lineup.

Crewson said the protest was not targeted at Global specifically, but rather Canadian broadcasters in general.

"Our airwaves are now filled with American shows 24-7," complained Crewson, a veteran actress who appears in the sci-fi show "ReGenesis," and the film "Away From Her."

"We’re here to say that they have a responsibility to the Canadian public out of the millions and millions of dollars they make from advertising, by showing American shows, to put some back into Canadian content. We need to hear our stories, we need to see our people and our stories on the airwaves during prime-time hours."

Inside the theatre, Global executives touted the return of hit shows like "Heroes" and "House" to their prime-time lineup and introduced a slate of new programs featuring stars Jimmy Smits, Julianna Margulies, Adam Arkin and Kelsey Grammer.

The broadcaster introduced a handful of new Canadian series as well, including the dark thriller "Durham County," sitcom "About a Girl," Coast Guard series "Search and Rescue" and dramedy "’da Kink In My Hair," based on the award-wiinning play of the same name.

Global is the third of the big three Canadian networks to reveal its fall lineup.

Earlier this week, CTV announced a powerhouse schedule heavy on U.S. imports and featuring no new Canadian programming, although Canadian successes "Degrassi," "Corner Gas" and "Canadian Idol," are set to return.

CBC’s fall lineup includes a sexy new miniseries, "The Tudors," starring British actor Jonathan Rhys Meyers and returning comedy "Little Mosque on the Prairie."

Global’s new series include "Cane," a multi-generational drama about a Latin family starring Smits, and "Back to You," a comedy about a TV news team featuring "Frasier" star Grammer and "Everybody Loves Raymond" star Patricia Heaton.

It was also announced that Global anchor Kevin Newman will be transferring from Vancouver to Ottawa, a move the network said makes its national newscast the only one to be anchored in the nation’s capital. The main production hub of the newcast will remain in Vancouver.

CanWest specialty channel gold mine

TORONTO (CP) _ CanWest Global Communications Corp. (TSX:CGS) could become the operator of a gold mine of specialty TV channels if the takeover of Alliance Atlantis Communications Inc. (TSX:AAC.B) is approved by regulators this summer, says an analyst familiar with both companies.

Kaan Yigit of Toronto-based Solutions Research Group said Tuesday that strong first-quarter earnings for Alliance Atlantis signal that the assets will prove lucrative for the long term.

Alliance Atlantis posted a 16.1 per cent surge in advertising revenue on strong audience growth in its specialty channels, which include HGTV, History and digital labels Showcase Action and the National Geographic Channel.

The company has "spent many years building those brands and you see the payoff from that standpoint in this crowded universe of brands and channels," said Yigit.

They’re "gold mines because those channels will perform well over the years."

That’s encouraging for CanWest, which is awaiting approval of a $2.3-billion takeover of Alliance Atlantis by a unit of its company, partnered with Wall Street investment bank Goldman Sachs, which is supplying 85 per cent of the financing.

The broadcast ad revenues were part of a overall solid quarter for Alliance Atlantis, whose profit almost doubled to $41.2 million from a year-ago $21.5 million with the help of worldwide sales of the CSI television franchise.

CSI revenue increased 74.3 per cent to a record quarterly take of $162.3 million on strong international licensing. Alliance’s partner in the series is CBS.

Chief executive Phyllis Yaffe said overall revenue grew 32 per cent to $358 million as advertising sales increased to $41.9 million. Subscriber revenue was up 8.5 per cent to $35.7 million.

Net earnings for the three months ended March 31 amounted to 98 cents per share, compared with 49 cents per share a year earlier.

Adam Shine, an analyst at National Bank Financial said profits gains beat his expectations because the company spent the last two years "maintaining margins amidst ongoing programming spending initiatives."

Alliance has also been making inroads into video-on-demand services, which Yigit said could help solidify its competitive stance in the future.

Last week, the company announced a pairing with Rogers Communications (TSX:RCI.B) to offer content from HGTV, Food Network, and National Geographic Channel on its digital boxes.

The CanWest deal still needs to clear some hurdles, including approval by the Canadian Radio-television and Telecommunications Commission and a legal challenge from Movie Distribution Income Fund (TSX:FLM.UN), which jointly owns a motion-picture distribution business with Alliance.

Nonetheless, the company expects the deal to be completed in July or early August.

Alliance Atlantis shares rose five cents to $51.35 Tuesday afternoon on the Toronto Stock Exchange.

Alliance, CanWest update acquisition

TORONTO, Alliance Atlantis Communications Inc. and CanWest Global Communications Corp. announced today that they expect that the completion of the Arrangement pursuant to which AA Acquisition Corp. (formerly 6681859 Canada Inc.) ("Acquireco") would acquire all of the outstanding shares of Alliance Atlantis for $53.00 cash per share will occur in July 2007 or early August, 2007.

As previously announced on January 10, 2007, Alliance Atlantis entered into an Arrangement Agreement with Acquireco, a corporation wholly owned by CanWest MediaWorks Inc. ("CanWest"), providing for an Arrangement with Alliance Atlantis. A Special Meeting of shareholders of Alliance Atlantis has been called for April 5, 2007 at 10:00AM (EST) in Toronto, Ontario to consider a special resolution to approve the Arrangement pursuant to section 192 of the Canada Business Corporations Act. A Notice of Special Meeting and Management Proxy Circular (the "Circular") dated March 5, 2007 were mailed to shareholders of Alliance Atlantis and are available on SEDAR at www.sedar.com under Alliance Atlantis’ profile.

CanWest and Alliance Atlantis had anticipated that the preparation and audit of certain of the financial information required by Acquireco in connection with debt financings being undertaken in connection with the Arrangement could be completed in time for a May closing. However, the exercise is taking longer than initially expected and the required information will not be available in time to permit completion of the Arrangement in May 2007.

As a result, Alliance Atlantis will be required pursuant to the Arrangement Agreement to provide more current unaudited financial statements and other information in respect of the first fiscal quarters of 2007 and 2006 in connection with the Acquireco debt financings. This required financial information is expected to be available in late June thereby permitting a July or early August closing.

Given the parties’ expectation as to timing for completion of the Arrangement, Alliance Atlantis currently intends to seek relief from the requirement to hold its annual meeting of shareholders by end of June 2007 so as not to hold such meeting prior to the completion of the Arrangement.

Shareholders should carefully review the Circular which provides more detailed information regarding the Arrangement and how to vote their shares. Shareholders are encouraged to complete, sign, date and return the form of proxy accompanying the Circular so that their shares can be voted at the Special Meeting in accordance with their instructions.

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