Alliance Atlantis call hit with MPD bid buzz
Alliance Atlantis Communications brass remained mum Friday as analysts pressed them to come clean on offers for the Canuck distribution subsidiary that it controls.In a conference call to discuss Alliance’s second quarter fiscals, chief financial officer David Lazzarato, who is also chair of Motion Picture Distribution, was peppered with questions about rumored takeover bids for MPD, an Income Trust in which Alliance holds 51%. Toronto-based Alliance has denied reports that it has rebuffed potential suitors for the company without informing its minority shareholders. The company said Wednesday it was not considering offers until it finished an internal review, probably in the fall. London-based Marwyn Investments went public early Friday with notice of a cash offer of C$394 million to C$414 million ($354.6 million to $372.6 million), valuing the shares at $9 to $9.45. Shares closed Friday up 32% at $7.42. The offer would also see Victor Loewy, Patrice Theroux and Paul Laberge, veteran MDP toppers who were ankled earlier this month, heading up the enterprise, which is Canada’s largest independent distributor and also includes Momentum Pictures in the U.K. and Aurum in Spain. “Does that not light a fire under you to try to expedite this review?” one analyst asked. “We’re trying to conduct this review thoroughly and as quickly as we can regardless of those other factors,” said Lazzarato, who added they would “fully explain our thinking” when the time was right. Earlier in the day Alliance put out a terse statement saying that if and when offers are received, “the boards of each entity will respond appropriately.” Lazzarato also declined to disclose any details regarding negotiations with suppliers. The departure of Alliance co-founder Loewy in particular, one of the best-connected people in the business, is believed to put some of the output deals in jeopardy, particularly New Line, with which it has a “key man” clause. Alliance posted a bottom line for the second quarter ended June 30 of $23.4 million, up from $9.6 million a year ago, thanks primarily to currency fluctuations and the effects of a stronger Canadian dollar. Revenue for the quarter climbed 5% to $227.9 million. Broadcasting revenue was up 6% to $69.1 million, with ad revenue up 3% and subscriber revenue up a boffo 11%; entertainment revenue climbed 19% to $84.7 million; MPD revenue dipped 7% to $74.1 million. “We are exceptionally pleased with the performance of the ‘CSI’ franchise,” said CEO Phyllis Yaffe. Alliance sold international second-window rights to the “CSI” franchise, of which it owns half, for $225 million over 10 years. “These sales demonstrate the strong interest in relicensing ‘CSI’ around the world,” she added.