Alliance seeks MPD buyer
EmptyOTTAWA -- Alliance Atlantis Communications Inc. announced Friday it is looking for a buyer for "some or all" of its 51% stake in movie distribution company Motion Picture Distribution.
Alliance Atlantis CEO Phyllis Yaffe said the decision to look for a buyer followed the completion of a strategic review of its holding in MPD.
"During the course of our review we have identified many opportunities for broadcasters and motion picture distributors in this environment of evolving delivery technologies," Yaffe said in a statement Friday. "We believe these new technologies are enhancing and facilitating consumer access to content and are growing the market for content owners.
"But, following a thorough analysis and review, we have concluded it is not necessary for AACI to own an interest in MPD in order for us to benefit from MPD's content and create value for our core broadcasting business."
Alliance Atlantis has hired RBC Capital Markets as its financial advisor and Bennett Jones LLP for legal advice on the possible sale. The company will provide investors with an update during its third-quarter conference call scheduled for the second week of November.
The Movie Distribution Income Fund, which owns the remaining 49% of MPD, responded Friday, saying it has formed special committees of the fund and its subsidiary trust to consider the implications of a sale by Alliance Atlantis.
Alliance Atlantis requires the fund's approval for any sale of interests in MPD.
The special committees will include fund trustees Rubin Osten, a chartered accountant who operates his own investment firm, Raspberry Investments, and David Richards, an accountant who is president and managing director of Network Capital Inc. and lead director of Forte Resources Inc.
The committees have retained CIBC World Markets Inc. and Stikeman Elliott LLP as their financial and legal advisors.
In late September, Alliance Atlantis secured movie product from New Line Cinema Corp. through Dec. 31, 2008 after re-hiring ousted MPD chair Victor Loewy as a consultant.
Loewy resigned after Alliance Atlantis fired former CEO Patrice Theroux and general counsel Paul Laberge in July.
Loewy had a "key man" clause in MPD's deal with New Line Cinema that allowed the U.S. movie producer to break the deal if Loewy wasn't involved. New Line accounts for about 15% of the MPD's total revenues.
MPD has since settled with Theroux and Laberge.
Following Loewy's departure, MPD tried to prevent him from establishing a competing Canadian distributor before hiring him back as a consultant.