The deadline for the deal has been extended by a week to Aug. 15, as reported earlier, so CanWest and Goldman Sachs can obtain bridge financing from a banking syndicate. CanWest said in a statement today that it’s deferring its previously considered high-yield debt offering “due to recent turmoil in the North American debt markets.”
CanWest and Goldman Sachs say they have settled the terms of their joint venture, including their contributions of equity to the company that will acquire Alliance Atlantis’ broadcasting assets.
When the deal is complete, Alliance Atlantis’ specialty channel, entertainment, and motion picture distribution businesses will be reorganized and split into separate groups that will be operated on a standalone basis, with certain other assets to be held separately.
The broadcasting assets will be held in various subsidiaries of CW Investments Co., whose voting shares will be two-thirds indirectly held by CanWest, with a 36% equity interest, while Goldman Sachs will indirectly hold one-third of the voting shares and approximately a 64% equity interest.
CanWest will own the Alliance Atlantis broadcasting business, with a purchase price of about $1.5 billion, funded through a combination of debt and equity. Goldman Sachs will own the Alliance Atlantis entertainment and motion picture distribution business.
While the CRTC considers whether to approve the deal, the shares and partnership interests of CW Investments’ subsidiaries that hold the broadcasting licences and certain other broadcasting assets and employees will be placed into a trust under the direction of an independent trustee. Should CRTC approval be granted, these shares and partnership interests will be released from the trust and delivered to a subsidiary of CW Investments. CW Investments’ specialty channels and CanWest’s Canadian television business will then be managed by CanWest under the terms of a management and administrative services agreement.
Under the terms of the shareholders’ agreement, CanWest will merge its Canadian television business with the CW Investments group in 2011, subject to any necessary regulatory approvals.
More details can be found in the news release.
