MONREAL – A bid from Calgary-based Shaw Communications to take-over financially-troubled Canuck broadcaster CanWest Global Communications passed a key hurdle late Friday when the deal was given court approval in Ontario by Justice Sarah Pepall. She approved the deal in Superior Court of Ontario late Friday afternoon.
This comes at the end of the same day in which a consortium headed by the Asper family – which used to control CanWest – launched its own C$120 million ($115 million) bid to take back the company. Catalyst Capital Group, a Toronto-based equity fund company, pulled together a group of companies to try to buy the company, with the help of U.S.
investment bank Goldman Sachs and the Asper family.
Their proposal is to take control of 32-percent of the equity in CanWest and the creditors would own the rest of the equity.
This consortium also includes two former executives from cable company Rogers Communications – Rael Merson, formerly CEO of Rogers, and John Tory, who used to be head of Rogers’ cable division.
CanWest Global has been under court-sanctioned bankruptcy protection as it attempts to restructure. Its problems stem from crippling debt as a result of the acquisition of a slew of cable channels owned by Alliance Atlantis.
Last week, Shaw announced that it had offered to take control of 20 percent of CanWest’s equity and 80 percent voting control for just $62 million. CanWest owns the Global network, one of Canada’s main TV network, and a bunch of cable channels.
The Shaw bid has already won the support of CanWest’s board of directors, but it met with opposition from Goldman Sachs, which already owns a minority stake in the CanWest division that owns 13 cable channels.