Cogeco passes on TQS shares
EmptyTORONTO -- Canadian cablecaster Cogeco Inc. on Tuesday told shareholders it will not exercise is right to purchase a 40% stake in Quebec broadcaster TQS Inc. up for grabs following a change in ownership control at minority stakeholder Bell Globemedia Inc.
Holding its annual shareholders meeting in Toronto, Montreal-based Cogeco said it will retain a controlling 60% stake in TQS and extend its agreement with Bell Globemedia, despite that media giant recently triggering Cogeco's right to acquire all the shares in the Quebec broadcaster.
Cogeco's TV arm and rival broadcaster CTV, a division of Bell Globemedia, since 2002 have jointly operated the TQS network, comprising six TQS TV stations and three French-language TV stations affiliated with the Canadian Broadcasting Corp..
But that arrangement was impacted by a December 2005 deal that saw phone giant BCE Inc. reduce its controlling 68.5% stake in Bell Globemedia to 20% by allowing the Thomson family of Toronto to raise its share of the broadcaster and newspaper publisher to 40% while Torstar Corp. and the Ontario Teachers' Pension Fund each acquired a 20% stake in Bell Globemedia.
Under the terms of their 2002 shareholder agreement for TQS, Cogeco could have purchased Bell Globemedia's 40% stake for fair market value after any change in ownership.
Instead, both parties have agreed to modify their shareholders agreement so that Bell Globemedia can postpone any friendly sale of its TQS stake to Cogeco from Feb. 15 to Jan. 1, 2009.