TORONTO – Look for CanWest Global’s Australian divestiture to pick up speed.
Alliance Atlantis Communications announced Wednesday morning that it is officially on the market, meaning the usual suspects like Corus Entertainment, Astral Media, CanWest Global and maybe Rogers Communications and Quebecor Media will soon be kicking tires and checking service records – if they haven’t already.
Bell Globemedia is about to start trying to digest CHUM Ltd. and is probably not going to be in the running, especially since it would probably run afoul of competition rules if it tried to grab both CHUM and Alliance Atlantis.
With 13 specialty services, such as Showcase, HGTV Canada, History Television, Food Network Canada, Showcase Action, IFC, National Geographic and others, all of which are growing and profitable, coupled with the multi-millions being brought in by the company-controlled CSI franchise, Alliance Atlantis is thought to be at its peak value right now and will surely set off a bidding war among Canadian media companies. Alliance Atlantis sells the three ratings leaders (CSI, CSI: Miami and CSI: New York) are sold to broadcasters worldwide.
CanWest will surely be at the front of the line forming in front of the A/A hq on Bloor St. E.
CanWest CEO Leonard Asper, just last month, told Cartt.ca his company could surely use more specialty services. "We would like to have (more specialties)… I think we can be creative and we’re certainly going to keep our eye open to get bigger… We need lots more services, but in the meantime, I think we’ve got enough to work with, with Global and CH, TVTropolis and the digitals – just getting better ratings, moving stuff out onto more platforms, re-branding some of our specialties, rolling with the digital platform, and exploiting that," he said.
"Even with those alone, I think we can do well, but it would be neat to have more specialties at some time."
CanWest is currently looking for a buyer for its Down Under media assets and would be in a better financial position to make a purchase when that is completed, said BMO Nesbitt Burns analyst Tim Casey, in a research note earlier this year.
In a short press release, Alliance Atlantis announced it is now "exploring strategic alternatives." As part of that process, AACI together with Southhill Strategy Inc., AACI’s controlling shareholder owned by AACI’s executive chairman, Michael MacMillan, and Seaton McLean, have recently sought expressions of interest from selected potential buyers as to their interest in purchasing AACI.
"Southhill has informed AACI that no decision to sell Southhill’s controlling interest in AACI has been made and that Southhill may decide not to sell its interest," says the press release. "If Southhill decides not to sell its interest, a sale of AACI is unlikely to occur," adds the A/A release.
However, when such "strategic alternatives" are explored, a sale is the usual end game. "A sale looks very likely," said industry analyst Scott Cuthbertson of TD Securities. He figured the share price range for a purchase would be in the $53 range, but that $60 wasn’t out of the question, raising the company’s potential purchase price north of $2.4 billion.
The company’s widely traded B shares closed trading Wednesday at $49, up 15.3% on the day.
A special committee of the AACI board has been formed to examine all opportunities and is comprised of Robert Steacy (Chair), Anthony Griffiths and Barry Reiter. AACI has engaged RBC Capital Markets as its financial advisor and Bennett Jones LLP as its legal advisor.
– Greg O’Brien
