CanWest sells NZ subsidiary for $283 mil
EmptyCanadian broadcaster CanWest Global Communications Corp. on Monday said it has agreed to sell CanWest MediaWorks (NZ) Ltd., its 70%-owned radio and TV subsidiary in New Zealand, to Australian private equity players for CAN$314 million ($283 million).
Winnipeg, Manitoba-based CanWest Global said it has a lock-up agreement with HT Media Ltd., a consortium of funds controlled by Ironbridge Capital Pty Ltd., the Australian private equity firm, to sell its stake in CanWest MediaWorks (NZ) for NZ$2.43 per share, or NZ$386 million ($283 million).
CanWest Global added that HT Media Ltd. has agreed to bid for the remaining 30% stake in CanWest MediaWorks (NZ), which was publicly floated in July 2004.
The sale follows a formal auction of CanWest Global's New Zealand broadcast holdings — TV networks TV3 and C4 and radio stations the Edge, Kiwi FM, the Rock and Solid G — begun last October.
"We are extremely pleased with the agreement that we have reached for the sale of MWL (MediaWorks NZ)," Tom Strike, president of CanWest MediaWorks International, said Monday in a statement.
Citigroup also is weighing a possible sale of CanWest Global's 56% stake in the Ten Group Pty Ltd., which operates Australian broadcaster Network Ten.
CanWest Global's decision to sell its broadcast assets Down Under follows a relaxation of foreign media ownership rules in Australia, a move that would allow the new Australian owners of CanWest MediaWorks (NZ) to expand into the Australian market.
CanWest Global said it will use the proceeds of the New Zealand sale to reduce debt and for "redeploying capital consistent with our corporate strategy."
That may include helping fund CanWest Global's recent CAN$2.3 billion ($1.99 billion) friendly takeover of rival Canadian broadcaster Alliance Atlantis Communications, a deal that will be largely financed by equity partner Goldman Sachs & Co.
As part of its new focus on the Canadian market, CanWest Global last August completed the sale of a 45% stake in TV3 Ireland and its 100% interest in TV3's Irish sales arm, CanWest Ireland Sales Ltd., for proceeds of CAN$188 million ($170 million).