Sale leaves CanWest with no voice
TORONTO — Control of one of Canada’s largest private media empires hangs in the balance this week after the controlling shareholder of Vancouver based Western Intl. Communications Inc. (WIC) sold her stake in the company to two competing interests and left a third out in the cold.
In a transaction worth C$91 million ($64.56 million,) Emily Griffiths, widow of WIC founder Frank Griffiths, announced that she was selling her controlling interest in the company on Friday.
The terms of the deal give WIC, which owns nine TV and 12 radio stations, and is a pay TV licensee as well as a holder of telecommunications and satellite network services in Canada, two controlling shareholders.
First refusal exercised
The Allard family of Edmonton and its company Cathton Holdings Ltd. (which previously held 30% of the company’s voting shares) exercised a right of first refusal to increase its WIC holdings to 49.99%. And through cable giant Shaw Communications Inc. the Shaw family of Calgary snapped up 49.96% of the company’s voting shares.
The loser in the deal is Winnipeg based CanWest Global Communications Corp., which owns 30% of the company’s equity, more than the Shaws and the Allards combined, but holds less than 1% of its voting shares. The transaction leaves CanWest and its flamboyant helmer, Israel (Izzy) Asper, with plenty of equity but no power.
He has two options if he doesn’t like the deal; either sell his equity interest or try to block the transaction through either the courts or Canada’s broadcast regulator, the CRTC.
Although CanWest has not yet announced its intentions, there is some doubt as to whether the transaction will go through as planned. The CRTC, which had previously launched a probe into Shaw due to concerns about the size of the company’s programming interests, has expressed concern about the effects the transaction will have on Shaw’s interests.
Griffiths is rumored to have squeezed Asper out intentionally because of bad blood between the two after his failed hostile takeover bid of WIC a couple of years ago and CanWest’s accumulation of equity in the company since.
Griffith’s daughter Mary Priebe and her husband Klaus have already resigned and been replaced as members of the board of directors.