Goldman sells cable channels to Shaw
Shaw acquires Canwest Global, excluding newspapersTORONTO -- Goldman Sachs & Co. has sold its Canadian cable channels to cable operator Shaw Communications in a deal that ends a nasty court feud over Canada's most profitable TV assets.
As part of a network of deals unveiled Monday, Calgary-based Shaw will acquire all of a restructured Canwest Global Communications Corp., excluding its newspaper assets, when it eventually emerges from creditor protection. The deal, valued at about $2 billion, including about $800 million in assumed debt, will see Shaw pick up Canwest Global's conventional and cable TV operations.
To complete the deal, Shaw will pay Goldman Sachs $700 million in cash for the lucrative stable of Canadian cable channels, including Food Network Canada and HGTV Canada. Canwest Global filed for court protection in the fall to keep creditors at bay while it attempts a restructuring.
But efforts to emerge from creditor protection were hampered by a battle for control of the media group between U.S. bondholders and Goldman Sachs, which owns 13 profitable cable channels that Canwest Global operates on behalf of the Wall Street investment house.
Shaw now proposes to pay the U.S. bondholders around $440 million to see them off, and another $38 million to pay out the broadcaster's other unsecured creditors. Shaw, the U.S. note-holders and Goldman Sachs also agreed to end all litigation that has arisen in recent months around their corporate brinkmanship.
That includes a March request by Goldman Sachs to the Ontario Court of Appeal to block Shaw and U.S. bondholders from taking control of a restructured Canwest Global.
The transactions, subject to regulatory, court and creditor approvals, remove a key hurdle to Canwest Global's restructuring plans as Shaw, a Canadian company, now bids for control of the domestic broadcaster with no more involvement from U.S. financiers or partners.
"The amended terms of the recapitalization transaction were agreed to by the parties in conjunction with an agreement between Shaw and the Goldman Sachs Entities which provides for the purchase by Shaw of all of the Goldman Sachs Entities' equity and voting interests in the CW Media Group of specialty television channels," Canwest Global reported Monday.
Shaw earlier secured court approval for a $95 million bid for voting control of CanWest Global. But that proposed transaction forced Shaw into potentially lengthy and tangled negotiations with Goldman Sachs over a 2007 shareholder agreement for the 13 cable channels. By making peace with Goldman Sachs, Shaw has also removes some of the uncertainty that may surround Canwest Global as it attends the upcoming Los Angeles Screenings to buy new and returning U.S. network series for Global Television and its specialty channels from its American studio suppliers. Shaw also indicated Monday that Paul Robertson, president of Corus Television, a Shaw division, will lead Canwest Global when it emerges from bankruptcy protection under its control.
In turn, Doug Murphy, head of Corus Kids and Nelvana, will step up to replace Robertson as Corus Television president. Canwest Global's existing shareholders will receive no compensation after Shaw acquires the restructured company. The Canadian broadcaster said it aimed to complete its court-directed reorganization by September.