TORONTO — Shaw Communications, Canada’s second-largest cable company, will split into two publicly traded firms so it can develop its cable and media concerns separately.
At a news conference Tuesday, the firm’s prexy, Jim Shaw, said the new companies of Calgary-based Shaw will be divided this way: Shaw Communications will keep its name and comprise cable, Internet service and other related assets; and an as-yet unnamed media firm will encompass 23 radio stations, six television stations and various other interests.
The new Shaw cable company will have annual revenues of about $51 million in its first full year of operation. The media firm, nicknamed Mediaco until the new name is unveiled, will generate $86.5 million a year, the company said.
In August, Shaw and CanWest Global Communications Corp. said they would divide up the substantial broadcasting assets of Vancouver-based Western Intl. Communications. Shaw and CanWest had waged a bidding war for WIC.
“The reorganization evolved from our vision to create a strong, vertically integrated, Canadian media company capable of competing against dominant global players,” Shaw said.
The transformation will let the cable and media companies continue acquiring assets, Shaw said after a news conference.
“I think there’s still more consolidation in the cable industry going to come,” he said. Also, “‘I think there’s more consolidation (for) the media company.”
The split will allow Shaw to avoid possible objections from Canada’s federal telecommunications regulator, the Canadian Radio-television and Telecommunications Commission, that could stem from its dual role as media producer and cable firm.
Shaw shareholders will receive stakes in both the new Shaw and the media firm. The Shaw family, which now controls about 70% of the voting shares, will control similar-sized stakes in both companies, Shaw said.
Shaw’s former chief executive, John Cassady, was named Mediaco’s new president and chief executive. He predicted the media company’s revenues will grow at a rate of 20% a year and even more in its initial year.
(Reuters contributed to this report.)