TORONTO – Investors have bid up CanWest Global Communications shares 24% over the past three weeks in anticipation of a big move in Australia.
CanWest shares closed at $10.65 today where at the end of September they were in the $8.50 range.
With the Australian government recently ratifying changes to its media company ownership rules, opening it up to foreign buyers, analysts expect CanWest to look at selling its Network TEN broadcasting assets as well as the company’s New Zealand radio and TV stations, too.
Today, CanWest said it has hired Citigroup Global Markets "to explore opportunities in South Pacific," said the press release. In Cartt.ca’s experience, when press releases from corporations say such a thing it can be code for "find a buyer."
Citigroup will "explore opportunities arising out of the new Australian media ownership law passed this month by the Australian Parliament. The new legislation is expected to take effect early in 2007," continues the CanWest press release.
"The new media law, which removes media-industry specific foreign ownership restrictions and significantly relaxes cross-ownership rules affecting broadcasting and publishing media, is widely expected to precipitate a substantial re-alignment of media ownership in Australia," says CanWest.
Citigroup will examine a range of possibilities "that might affect CanWest’s 56.4% economic interest in Network TEN, one of Australia’s three major television networks, Eye Corp., TEN’s wholly-owned out-of-home advertising subsidiary, and CanWest MediaWorks (NZ) Ltd, CanWest’s 70%-owned television and radio broadcasting subsidiary in New Zealand.
"No decisions have been taken with respect to possible outcomes, which include continuation of the status quo," cautions the release.
