CALGARY – Shaw Communications has bought Canwest Global Communications Corp. for $2 billion, the companies announced early Monday morning.
The deal includes 100% of CanWest’s over-the-air and specialty television businesses, including all of the equity interests in CW Investments Co., the CanWest subsidiary that owns the specialty television channels acquired from Alliance Atlantis Communications Inc. in 2007.
The Calgary-based cable giant also announced that Paul Robertson will have overall responsibility for CanWest, including the Canadian Television Limited Partnership and the CW Media Group subsidiaries. Robertson, who was most recently president of Corus Television, will report to Shaw CEO and vice chair Brad Shaw effective immediately.
“We are pleased to announce that we have come to an agreement with all constituent parties involved in a restructured CanWest, including Goldman Sachs, and are excited about the opportunity to acquire the entire company now”, Shaw said in a statement. “Over the last number of months we have conducted extensive negotiations with all parties and have met with management of CanWest several times. The recent restructuring initiatives undertaken by CanWest have positioned it as a pure play Canadian broadcaster and we are excited about this transformative transaction for Shaw as we believe the combination of content with our cable and satellite distribution network, and soon to be wireless service, will position us to be one of the leading entertainment and communications companies in Canada."
The total consideration includes approximately $815 million of net debt at CW Media Group. The remainder of the purchase price will be funded with cash on hand, which is currently in excess of $700 million, and through Shaw’s existing credit facility.
Shaw announced in February that it had struck a deal with CanWest and its Ad Hoc Committee for a minimum 20% equity investment in a restructured CanWest. While the offer was approved by the CanWest board and the Ontario Superior Court of Justice, it was subject to certain conditions such as the resolution of matters affiliated with Goldman Sachs regarding CanWest’s interest in CW Media Group. To resolve these issues, Shaw has agreed to buy out Goldman’s equity interest for $700 million.
CanWest creditors will receive $478 million in cash in compromise of their debt and other claims against CanWest in keeping with the restructuring plan filed under the Companies’ Creditors Arrangement Act (CCAA).
The CCAA plan remains subject to certain conditions, including CanWest creditor and Court approvals, plus regulatory approval from the CRTC and the Competition Bureau.
