HALIFAX – Family Channel owner DHX Media announced its board of directors has commenced a process “to explore and evaluate potential strategic alternatives focused on maximizing shareholder value,” reads a mid-Monday press release.
“These alternatives could include, among other things, the sale of part or all of the company, a sale of some of the assets of the company, a merger or other business combination with another party, or other strategic transactions.”
The release notes that management supports the review. “The Board believes that pursuing these complementary paths is in the best interests of DHX Media's shareholders, employees and stakeholders and is designed to maximize value,” it reads.
The company, which just reported disappointing Q4 results, has not set a timetable for this process nor has it made any decisions related to any strategic alternatives at this time and this may not even result in a transaction. The DHX release said the company will be making no further comment on this.
The company owns substantial content assets, focused on kids, including Peanuts, Teletubbies, Strawberry Shortcake, Caillou, Inspector Gadget, and the Degrassi franchise. Its library consists of over 13,000 half-hours of content. Through its subsidiary, WildBrain, DHX Media also operates one of the largest networks of children's channels on YouTube.
On the broadcast side, DHX owns Family, Family Junior, Family CHRGD and Telemagino. The company could be sold to any foreign entity – as long as the regulated Canadian TV assets were spun off to a Canadian firm.
"The Family Channel has experienced declines in recent years, which has served as a drag on consolidated results. Moreover, ex-broadcast, DHX could be viewed as an even cleaner content ‘pure-play’, as well as a genuine takeover target. We, however, believe that the Family Channel can potentially be a useful asset alongside a multi-channel media group, which would be better positioned to derive synergies and reformat the network," wrote Canaccord Genuity analyst Aravinda Galappatthige in a note to investors on Monday.
