Shaw to take control of Canwest
Goldman Sachs to renegotiate 2007 ownership agreementTORONTO -- Goldman Sachs & Co. looks set to renegotiate a 2007 ownership agreement for 13 Canadian cable channels after cable giant Shaw Communications secured court approval to take control of the restructuring Canadian broadcaster Canwest Global Communications Corp.
Calgary-based Shaw beat a rival $120 million bid by Canadian equity fund Catalyst Capital Group and Canwest Global Communications Corp. CEO Leonard Asper for a controlling stake in the embattled Canadian broadcaster.
The Ontario Superior Court of Justice instead backed a $95 million Shaw Communications bid as it continues a five-month journey to steer Canwest Global out of creditor protection.
Pending regulatory approval and a successful court-directed recapitalization, Shaw will acquire at least a 20% equity stake in Canwest Global and voting control of the broadcaster.
Goldman Sachs backed an eleventh-hour failed bid for control of Canwest Global led by Toronto equity firm Catalyst Capital Group, in part because the winning Shaw bid proposes to tear up a shareholders agreement over how 13 Canadian cable channels that Canwest Global operates on behalf the U.S. investment bank are run.
Goldman Sachs in 2007 largely financed the purchase of the 13 former Alliance Atlantis cable channels by Canwest Global and has an agreement to either be bought out or sell its stake in the channels on the open market starting in 2011.
In court Friday, lawyers for Goldman Sachs reiterated criticism that they have been kept in the cold about the continuing restructuring of Canwest Global.
Lawyers for Shaw Communications assured the Ontario Superior Court of Justice that Goldman Sachs will have a chance to negotiate a new agreement with the cable operator once its application-controlling stake in Canwest Global is successfully completed.
Before Shaw takes hold of Canwest Global, the Ontario court must first approve Canwest Global's overall recapitalization.