TORONTO – Corus Entertainment is once again disputing “distorted information, obfuscation and misstatements” allegedly made by company shareholder The Catalyst Capital Group over Corus’ proposed acquisition of Shaw Media.
In a news release late Tuesday, Corus strongly rejected proposals circulated by Catalyst, including a proposal to terminate the outstanding Corus subscription receipts offering in lieu of a hypothetical rights offering backstopped by Catalyst. Corus said that Catalyst’s proposals are not in the interests of Corus shareholders and that “the hypothetical rights offering proposed by them is both unworkable and self-interested”.
“Corus’ widely publicized subscription receipts offering was broadly and fully marketed to both existing Corus shareholders and new long-term oriented shareholders”, reads the release. “The underwriting syndicate included the retail distribution network of the six largest Canadian banks representing over 6,700 investment advisors across Canada. Existing investors were treated favourably in the allocation process.
In contrast, Corus believes that Catalyst’s proposed rights offering is an attempt to profit from minority shareholders and potentially end up with a large ownership stake in Corus. The Catalyst “backstop” appears to be an attempt by Catalyst to acquire Corus shares at the same $9.00 price that they have been criticizing as too low, and to provide themselves with preferential access to equity at that price.”
Corus said that Catalyst filed a "misleading” proxy circular Tuesday urging Corus shareholders to vote against the transaction, while at the same time asking shareholders to support an "entirely hypothetical" Catalyst rights offering. Corus shareholders will vote on the proposed acquisition at a special meeting scheduled for March 9.
“We categorically reject the Catalyst proposals. The combination of Corus and Shaw Media is a game-changing transaction that will generate long-term value for all shareholders,” said Corus Entertainment president and CEO Doug Murphy, in the release. “The merits of the acquisition are compelling and we note that two leading independent proxy advisory firms have recommended that shareholders vote for the acquisition.”
In a separate news release on Wednesday, Corus said that it has posted a summary presentation for shareholders that discounts Catalyst's claims and “diversionary tactics”.
Corus entered into a share purchase agreement with Shaw Communications Inc. on January 13 to acquire Shaw Media for $2.65 billion, to be paid with a combination of cash and the issuance of Class B shares to Shaw.
