TORONTO — CanWest Global Communications announced Tuesday that it has picked up a majority interest in Toronto-based Fireworks Entertainment Inc. in a friendly transaction worth about C$40 million ($28 million).
CanWest is acquiring all 7.3 million subordinate voting shares of Fireworks held by its principal shareholder, chairman and CEO Jay Firestone, who formed the company in 1996 after leaving his position as former vice chairman and principal dealmaker at Alliance. About $3 million of the proceeds to Firestone will be deferred for five years, conditional upon his staying on as CEO.
Toronto-based Fireworks finances, produces and distributes film and TV programs, including “La Femme Nikita,” which airs on USA Network and in Canada on the CTV Network. Fireworks also finances the series “Pacific Blue,” which is currently on USA Network.
This is Winnipeg-based CanWest Global Communications Corp.’s first foray into production. “We have been considering entering into the production and distribution business for some time,” said CanWest exec VP Leonard Asper in a prepared statement, “and in our view the acquisition of Fireworks represents excellent value, but more importantly, a new direction for future growth of CanWest.”
CanWest Global owns and operates the Global Television Network and Global Prime cable network in Canada.; TV3 and TV4 and the More FM radio network in New Zealand, and has interests in Australia’s TEN television network, Ireland’s TV3 network and Northern Ireland’s Ulster TV.
CanWest also purchased 2 million multiple voting shares and 2.3 million subordinate voting shares from four institutional Fireworks shareholders and has agreed to purchase all Fireworks shares held by four other Fireworks shareholders. All purchases were made at $2.44 per share. In addition, CanWest has made an offer for any and all remaining subordinate voting shares. When the transaction is complete, CanWest will own 84% of Fireworks’ voting shares and 74% of its equity, as well as whatever else is tendered to its bid.