Canwest sets another legal challenge for Shaw
CEO Asper aims to derail $2 billion takeover of TV assetsTORONTO -- There's no going away quietly for former Canwest Global Communications Corp. CEO Leonard Asper.
Canwest Global, the Canadian media empire founded by his late father Israel Asper more than 30 years ago, is to seek court approval to emerge from creditor protection on June 22, and creditor approval for its financial restructuring on July 19.
But before Canwest Global passes those hurdles, Leonard Asper, who left the top post last March, has launched yet another legal challenge to derail a $2 billion takeover of the company's TV assets by cable operator Shaw Communications.
A group of rebel shareholders led by Asper have called for the Shaw deal to be ditched and for a 30-day auction of the TV assets to be conducted.
The ad hoc group of aggrieved investors in court documents argued Shaw first proposed to acquire a 20% equity stake in Canwest Global, which an Ontario court directing the restructuring blessed on May 3.
Canwest Global tipped itself into creditor protection in late 2009 after buckling under the weight of a $4 billion debt load.
Asper left Canwest Global last March when the Winnipeg, Manitoba-based media group and its board supported the initial $95 million bid from Shaw for a minority stake.
But subsequently, the court mediated a $2 billion sale to Shaw to end a bitter tussle over the TV assets with Goldman Sachs.
The Asper-led group told the Ontario court that the $2 billion deal was hammered out behind the scenes without Canwest Global shareholders being aware that the entire company was up for grabs.
Asper and Goldman Sachs & Co. earlier failed with a rival bid for Canwest Global to enable the Asper family to remain a major investor in the Canadian TV and newspaper publisher.
Elsewhere, Canada's largest media union, the Communications, Energy and Paperworkers Union of Canada, is calling for the $1.1 billion sale of Canwest Global’s newspaper division, Canwest LP, to a consortium led by U.S. bondholders to be reviewed under the federal Investments Canada Act.
“Parliament should be acting now to ensure these newspapers remain under Canadian control and ownership,” Peter Murdoch, the CEP’s vp of media, argued.
He argued increased U.S. ownership of the national newspaper chain will disadvantage Canadian advertisers.
“Our newspapers are a cornerstone of Canadian democracy and we cannot allow them to become foreign-owned,” Murdoch added.
In separate court documents, Canwest Global chief restructuring officer Thomas Strike defended the proposed $2 billion deal with Shaw as “in the best interests of affected creditors and a broad cross-section” of the company’s investors.
“There is no evidence that a further marketing process would have resulted in a recovery for the shareholders,” he argued.