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Alliance Atlantis sold for $2 billion

CanWest and Goldman Sachs pony up

TORONTO — Just hours after confirming they were in takeover talks, CanWest Global Communications and Goldman Sachs Capital Partners inked a deal to acquire Alliance Atlantis Communications for C$2.3 billion ($1.96 billion), or $45 per share.

The company will be broken up. Goldman Sachs-controlled companies will take AAC’s 50% stake in the “CSI” franchise and AAC’s distribution biz; CanWest Global gets Alliance Atlantis’ 13 specialty channels.

Goldman Sachs also has inked a deal with “CSI” co-owner CBS that turns over the international distribution rights of “CSI,” “CSI: Miami” and “CSI: NY” to the Eye. Previously, Alliance Atlantis distributed the series internationally.

Alliance Atlantis put itself on the block in December.

“Today’s transaction is consistent with CanWest’s strategy to enhance its existing television business and expand its presence in the fast-growing specialty television sector,” said Leonard Asper, prexy-CEO of Winnipeg-based CanWest.

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“The combined expertise of CanWest and Alliance Atlantis will enable us to produce even better Canadian content, promote it more effectively and provide greater access to more viewers across more platforms.”

CanWest, which has print and broadcasting assets in Canada and radio and television interests in Ireland, Australia and New Zealand, missed the boat on the pay television explosion in Canada. However, the AAC acquisition further entrenches CanWest as one of the two largest media companies in the Great White North.

“I believe this transaction represents great value for our shareholders,” said Michael MacMillan, executive chairman of Alliance Atlantis and the company’s co-founder and controlling shareholder. “The combination of CanWest’s conventional and specialty television businesses and Alliance Atlantis’ 13 specialty television channels creates an excellent foundation for future growth in both businesses.”

Alliance Atlantis shares closed at a new 52-week high on the TSX of $46.08, up 1.9%.

Deal is subject to regulatory approval as well as the approval of Alliance Atlantis shareholders, 80% of whom have already indicated they intend to give the greenlight. The shareholder vote is skedded for the spring and the deal is expected to close this summer. The broadcast assets of CanWest and AAC are expected to be fully combined by 2011.

In addition to its 13 specialty channels and “CSI” stake, Alliance Atlantis also controls Motion Picture Distribution, Canada’s largest independent distributor, and owns Momentum Pictures in the U.K. and Aurum in Spain.

The debt-laden CanWest reportedly sought out investment bank Goldman Sachs in August to help it find a way to scoop up AAC. Move came after CTV Globemedia (formerly Bell Globemedia) announced its acquisition of Chum, the most recent deal in a rapidly converging Canadian media landscape.

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