Alliance Atlantis takeover challenged in court
EmptyTORONTO -- A May 18 court date has been set to consider a bid by Movie Distribution Income Fund to veto the proposed CAN$2.3 billion ($1.99 billion) takeover of domestic broadcaster Alliance Atlantis Communications by CanWest Global Communications and equity partner Goldman Sachs and Co.
Toronto-based Movie Distribution Income Fund, which holds a 49% stake in indie distributor Motion Picture Distribution LP, went to court last week to secure a say in who the Canadian partner will be after Goldman Sachs purchases the entire movie distribution unit, which includes Alliance Atlantis' 51% controlling stake.
Canadian law requires that Goldman Sachs have a Canadian partner to exercise effective control over MPD as movie distribution companies are considered culturally sensitive entities.
The May 18 fairness hearing will additionally consider whether the income trust's consent is required before CanWest Global and Goldman Sachs acquire Alliance Atlantis, which also has 13 cable channels and a 50% stake in the popular "CSI" TV crime series franchise.
Rubin Osten, chairman of a special committee at Movie Distribution Income Fund, said the income trust has held talks with Goldman Sachs and the MPD management "to address our concerns" and that the hearing should provide time for "the process to run its course."
In a statement, Alliance Atlantis executive vp and CFO David Lazzarato said the May 18 hearing will have no impact on CanWest Global and Goldman Sachs closing their takeover deal, likely in late July or early August.