TORONTO — CanWest Global Communications, Shaw Communications and Corus Entertainment announced an agreement Friday regarding the division of the assets of media giant WIC Western Intl. Communications.
The agreement appears to end nearly two years of turmoil during which time Shaw and CanWest — major stockholders in WIC — had fought a pitched battle for control of the media conglomerate. The next hurdles will involve federal broadcast regulators and tax authorities.
Under the terms of the agreement, Shaw will acquire WIC’s interest in Canadian Satellite Communications; Corus will take WIC’s radio stations and some of its pay and specialty TV assets; and CanWest will receive the TV broadcasting interests, including its interests in ROB TV. The agreement remains subject to approval by Canada’s broadcast regulator.
The deal itself is not vastly different from another agreement announced 18 months ago in the aftermath of a battle between Shaw and CanWest for control of Vancouver, Canada-based WIC. The principals learned that the initial division, between Shaw and CanWest, would incur a hefty tax bill, and the two parties opted to seek a restructuring that was more advantageous.
Regulatory approvals also promised to be a thorny issue. The Canadian Radio-Television and Telecommunications Commission (CRTC) made no secret of the fact that it was unhappy about ownership concentration and concerned about “undue preference” that cablers could give their own stations in a crowded analog cable spectrum.
About a year ago, Shaw split its media assets off into an arm’s length separate entity, Corus Entertainment, which went public in September. While Shaw Communications is not involved in Corus, the Shaw family does hold shares in the company. Analysts said this division may grease the wheels at the CRTC.
Hearing delay sought
In light of the agreement, Shaw, CanWest and Corus have requested that the CRTC suspend a scheduled hearing on Shaw’s acquisition of WIC shares, set for Oct. 26. If in the time before the delayed hearing Canadian cablers implement digital cable as promised, the CRTC will no longer have concerns about undue preference, analysts said.
Deal is expected to close by Nov. 1.