Despite a last-minute rival bid by Canwest's founding family, the court overseeing the restructuring of Canwest Global has approved a takeover bid by Shaw Communications.
The Aspers made an 11th-hour bid to retain control of the broadcaster their family founded, teaming up with a private equity company and television executives to launch a rival offer for Canwest.
The group led by Catalyst Capital Group offered to pay $120 million for a 32% equity stake and voting control of a restructured Canwest. The offer, which doesn’t include the newspaper business, aimed to keep Canada’s second-largest private television network as a pure play broadcaster.
“There is certainly the will, I’m just not sure there’s a way,? said Iain Grant, a telecom analyst with the Seaboard Group, referring to the family¹s bid to retain control. “They are trying to rescue a model that’s clearly flawed and probably doomed to failure.? Nevertheless, the Asper offer failed to trump a rival bid from Shaw Communications, which offered buy 20% of Canwest's equity and 80% of its voting stock for an undisclosed amount, Canadian Press is reporting.
The Shaw offer, which analysts say is at least $65 million, had the backing of an ad hoc committee of key creditors and the company.
However, the Shaw investment must still be approved by numerous groups including Canwest creditors and the CRTC, and they must deal with U.S. investment bank Goldman Sachs, which partners with Canwest on some of its special channel assets.
The Asper family teamed up with former Rogers Communications’ executives Rael Merson and John Tory, former provincial Progressive-Conservative leader, for their rival bid.
Canwest Global, which operates 18 specialty channels and owns five, filed for bankruptcy protection in October last year after struggling under almost $4 billion in debt. The stable includes channels such as Global, National Geographic and MovieTime.
The group's newspapers, which include titles such as the Vancouver Sun and Calgary Herald, are being sold as part of a separate reorganization plan.
Canwest was founded by Israel Asper, who bought the assets of North Dakota station KCND-TV in 1974. He built the group through a series of acquisitions, with aspirations of becoming a global media power.
The acquisitions took their toll on the company’s financial position, running up debts that became unmanageable when global economies collapsed and advertising revenue dried up.
does this affect Aspers plans to buy the Bombers?