Alliance takeover delayed by one week
EmptyTORONTO -- The continuing credit market crunch on Monday led Canadian broadcaster CanWest Global Communications Corp. and equity partner Goldman Sachs & Co. to delay by one week (to Aug. 15) the closing of their $1.99 billion takeover of rival broadcaster Alliance Atlantis Communications.
CanWest Global and Goldman Sachs initially expected to close Aug. 7, but asked for and received a delay from Alliance Atlantis to complete debt financing needs.
"The extension of the outside date has been agreed in order for an affiliate of Acquireco (CanWest Global and Goldman Sachs) to complete its debt financing, the proceeds of which will be used to finance part of the consideration for the arrangement," the companies said in a statement.
CanWest Global and Goldman Sachs orginally wanted to do a high-yield debt offering, but have now arranged bridge financing to complete the deal for Alliance Atlantis, which comprises 13 cable channels, a half-stake in the "CSI" franchise and a Canadian-based movie distributor.
The acquirers had originally considered a high-yield debt offering to finance the deal. But market volatility led Canadian cable giant Quebecor Inc. to pull a $750 million junk bond sale two weeks ago.
Ben Mogil, an entertainment analyst with Toronto-based Westwind Partners, on Monday said that current market conditions which restrict highly levered takeovers over time will lead to higher interests costs for CanWest Global and slow its debt repayment schedule.
On completion of the deal for Alliance Atlantis, CanWest Global and Goldman Sachs will release details of how they will wind up the AAC-Global television entity created from the takeover.