|by:||May 10, 2010|
The media landscape has shifted significantly early this month, as Calgary-based Shaw Communications announced a new deal that will see it gain full control over Canwest's conventional and speciality television business.
Worth approximately $2 billion, the deal effectively ends Shaw's dispute with Goldman Sachs, which had asked the Ontario Court of Appeal to block its previous bid for the company, which would have seen it gain control of 20% of Canwest's equity and 80% of its voting stock. Under the terms of the new deal -- which still must pass muster with Canwest's creditors, the courts and the CRTC -- Shaw will acquire Goldman Sachs' stake in the company for $700 million.
"This agreement is really significant and it's good news because it brings much-needed stability to the business," said John Douglas, senior VP of public affairs at Canwest.
"It means that there is a clear finish line in front -- we have overcome a significant hurdle for emerging from creditor protection, and it also of course means we'll have a well-capitalized, financially strong company behind us."
Outstanding claims against the company still need to be resolved, which is expected "very soon," Douglas says, and a date by which creditors will vote on the deal will be announced in coming weeks.
Canwest filed for creditor protection for its television division in October. Shaw made its first offer for the company in February, but the deal hit a roadblock when Goldman Sachs, which partnered with Canwest on the purchase of the former Alliance Atlantis channels, sought to block it in court. The companies have been negotiating in court since.
In a separate deal, Torstar Corp. says it has made an offer on Canwest's newspapers and digital businesses -- joined by Fairfax Financial Holdings.
From Media in Canada