TORONTO – Bell Globemedia wants to pay $1.7 billion for CHUM Limited.
As reported earlier today, BGM will pay $52.50 per common share and $47.25 per non-voting class B share. The cash consideration represents a 50% premium over the 10-day weighted average trading price of the common shares and a 57% premium over the 10-day weighted average trading price of the non-voting class B shares.
Both the board of directors of CHUM and the controlling Waters family have approved the deal.
Prior to the deal, however, the company today announced the layoff of 281 staffers at its operations around the country, reported first by Cartt.ca.
CHUM has scheduled a conference call at 4 p.m. to discuss details.
"The estate of Allan Waters and various related entities, which are the company’s controlling shareholders, have entered into a lock-up agreement with BGM which provides that, subject to certain terms and conditions, they will deposit all of their Common shares and non-voting class b shares to the offer. They own a total of 5,981,015 common shares, representing approximately 88.6% of the outstanding common shares, and 2,812,118 non-voting class B shares, representing approximately 13.2% of the outstanding non-voting class B shares.
The offer is a result of a sale process conducted by Blair Franklin Capital Partners acting on behalf of the company’s controlling shareholders. BGM was approached as part of this sale process.
The deal does allow for CHUM to accept a higher offer, for a $41 million fee.
"In Bell Globemedia’s offer, we not only found value for shareholders, but confidence that we would be placing CHUM in the hands of an owner with the financial resources and track record to continue to grow and build on our collective legacy," said Jim Waters, chairman, CHUM Limited.
"We are able to make this premium offer because Bell Globemedia is clearly the most logical buyer of CHUM. There is a unique strategic fit to our operations that can make the united company a stronger national champion in broadcasting. We intend to maintain and build the valuable CHUM brands and develop more opportunities for Canadian programming," added BGM CEO Ivan Fecan.
"The Waters family has built a remarkable organization and our intention is to continue their legacy," Fecan added. "With regulatory approval, we intend to serve Canadian audiences with both CTV and Citytv stations. We will maintain separate and independent news divisions in order to ensure a continued diversity and competition in news coverage. The specialty television channels of the two companies are complementary and we are excited by the prospects of adding CHUM’s strong radio stations to our services."
"Today’s announcement provides for a strong future for the stations, brands and innovative content that CHUM delivers to audiences from coast to coast," said Jay Switzer, president and CEO, CHUM Limited. "CHUM and BGM have historically been complementary – both share a passion for excellence and each serves Canadians in its own way. Together, we will have the creative and financial strength to ensure a strong Canadian presence in the rapidly evolving media landscape."
BGM expects to mail a take-over bid circular shortly.
