TORONTO – Corus Entertainment shareholder The Catalyst Capital Group is calling for full disclosure from the Shaw family into the process behind the proposed sale of Shaw Media to Corus.
In an open letter posted Friday, Catalyst questioned whether the minority shareholders of both Shaw and Corus were protected, and if so, wants the company to prove it.
“As the deal is a related party transaction, minority shareholders in both Corus and Shaw are entitled to know the asset was sold via a fair, competitive process – not a closed process in which Corus was forced to bid against itself”, reads the letter. “A competitive process is a best practice in the M&A world. It protects minority shareholders of both companies.
“If there was a competitive process, we ask you to release the terms and conditions of all other offers, so that Corus shareholders can see whether it was really necessary for Corus to provide the Shaw family with benefits not proportionately available to all other Corus minority shareholders.”
Catalyst has pledged to vote against the $2.65 billion transaction citing the high price, the lack of disclosure around the sale process, and Shaw’s “unwillingness to consider better alternatives”.
"Catalyst concedes it's possible there was a fair and competitive process to sell Shaw Media to Corus, but it seems unlikely given the result – and the fact that the Shaw family has a $1 billion bias, since its $1.2 billion interest in Shaw Communications is ten times larger than its $100 million interest in Corus," said Catalyst managing director and partner Gabriel de Alba, in a statement.
Catalyst is urging minority shareholders to vote against the proposed acquisition in its current form, and launched a website that it says offers its analysis and alternatives.
