4:06 PM EDT ON 12/07/06 CHUM to be part of Bell Globemedia
RICHARD BLACKWELL Globe and Mail http://www.theglobeandmail.com/servlet/story/RTGAM.20060712.wchum0712/BNStory Bell Globemedia will pay $52.50 for the common shares and $47.25 for non-voting Class B shares of CHUM Ltd., in a blockbuster deal that will see one of Canada's iconic private broadcasters merged into the BCE-owned media conglomerate. The deal sets an enterprise value on CHUM of $1.7-billion. The offers represents premiums of 50 and 57 per cent over the 10-day weighted average trading price of the two classes of shares, the company said. CHUM's common shares last traded at $35, while the non-voting shares last traded at $31.25 Shares in CHUM Ltd. were halted all day, pending the announcement. CHUM has signed a support agreement to back the offer. The controlling shareholder, the estate of founder Allan Waters, has signed a lock-up deal to tender its shares. The estate and related entities hold about 89 per cent of the common shares and 13 per cent of the non-voting shares. But the board and controlling shareholder can accept a better offer, if BGM fails to match it within three business days. In that scenario, BGM would get a break fee of $41-million. A special independent committee of CHUM directors has approved the take-over. CHUM chairman Jim Waters, Allan Waters' son, said in a statement that: "In Bell Globemedia's offer, we not only found value for shareholders, but confidence that we would be placing CHUM in the hands of an owner with the financial resources and track record to continue to grow and build on our collective legacy." The combined entity would be a media powerhouse, although the Canadian Radio-television and Telecommunications Commission could force it to sell some of its television properties because of overlap in several markets. Currently, CHUM owns a national network of 33 radio stations, 12 local television stations and 21 specialty television channels. The local television stations include Citytv stations in Toronto, Vancouver, Calgary, Edmonton and Winnipeg, and A-Channel stations in Barrie, Ottawa, London, Windsor, and Wingham, Victoria, and Vancouver and CKX Television in Brandon, Manitoba. BGM chief executive Ivan Fecan said the combined company wants to get regulatory approval to "serve Canadian audiences with both CTV and Citytv stations." The new entity will maintain separate news divisions to ensure "continued diversity and competition in news coverage," he said. BGM said it expects to divest the A-Channel stations. CHUM announced today that it is cutting 281 positions at television stations across the country because of economic pressures. Bell Globemedia owns the CTV television network, which has 21 conventional television stations across Canada, and has interests in 17 specialty channels. It also owns the Globe and Mail and has a 15 per cent interest in Maple Leaf Sports and Entertainment, which owns the Toronto Maple Leafs, Toronto Raptors and the Air Canada Centre. Allan Waters died in December. At that time Jim Waters said the family was not interested in selling the company. He said that if an offer for the company was received, he would have a fiduciary responsibility to present it to the CHUM board. In its announcement, however, CHUM said the controlling shareholder had been looking for a buyer and had hired advisers to conduct the sales process. "BGM was approached as part of this sales process," the company said. Bell Globemedia is 68.5 per cent owned by BCE Inc., with the remainder held by the Thomson family's holding company Woodbridge Co. Ltd. An agreement not yet finalized will see Ontario Teachers Pension Plan and Torstar Corp. each pick up 20 per cent of BGM. Torstar said in a release that it will participate in the CHUM deal, but that its additional financial commitment is not expected to exceed $100-million. ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
