CanWest Global Communications Corp. and Goldman Sachs Capital Partners Announce Agreement to Acquire Alliance Atlantis Communications Inc.
TORONTO, Jan. 10 - CanWest Global Communications
Corp. ("CanWest") and GS Capital Partners, a private equity affiliate of
Goldman, Sachs & Co., announced today that a new acquisition company has
entered into a definitive agreement with Alliance Atlantis Communications
Inc. ("Alliance Atlantis") to acquire all of its outstanding Class A voting
and Class B non-voting shares at a purchase price of CDN$53.00 per share in
cash for an aggregate price of approximately CDN$2.3 billion.
"Today's transaction is consistent with CanWest's strategy to enhance
its existing television business and expand its presence in the fast
growing specialty television sector," said Leonard Asper, President & CEO
of CanWest. "The combined expertise of CanWest and Alliance Atlantis will
enable us to produce even better Canadian content, promote it more
effectively, and provide greater access to more viewers across more
platforms. We are thrilled to be working with Goldman Sachs to effect this
strategic transaction."
"I believe this transaction represents great value for our
shareholders," said Michael MacMillan, Executive Chairman of Alliance
Atlantis. "The combination of CanWest's conventional and specialty
television businesses and Alliance Atlantis' 13 specialty television
channels creates an excellent foundation for future growth in both
businesses."
The acquisition of Alliance Atlantis is to be carried out by way of a
statutory Plan of Arrangement. The newly formed acquisition company is an
indirect wholly-owned subsidiary of CanWest. The Arrangement requires a
vote by Alliance Atlantis' Class A voting and Class B non-voting
shareholders at a meeting of shareholders, which is currently expected to
be held in the spring of 2007. Shareholders representing approximately 80%
of the Class A voting shares, have agreed to vote their shares of Alliance
Atlantis in favour of the shareholders' resolution approving the
Arrangement. The Arrangement is also subject to court approval as well as
certain other customary conditions, including the receipt of regulatory
approvals. Pending approval from the Canadian Radio-television and
Telecommunications Commission ("CRTC") for the change of ownership and
transfer of control of the specialty television channels, the securities of
the relevant regulated entities will be deposited with a trustee pursuant
to a voting trust agreement approved by the CRTC.
A special committee of the Board of Directors of Alliance Atlantis,
comprised of Robert Steacy (Chair), Barry Reiter and Anthony Griffiths (the
"Special Committee"), has reviewed the Plan of Arrangement in consultation
with its legal and financial advisors. The Special Committee unanimously
recommends the Plan of Arrangement to the company's Board of Directors, and
the Board of Directors unanimously recommends (with one director recusing
himself due to conflict) that shareholders vote in favour of the
Arrangement. RBC Capital Markets has provided an opinion to the Board of
Directors indicating that, as of the date of such opinion, the
consideration under the Plan of Arrangement is fair from a financial point
of view to the shareholders.
A CanWest-controlled company will be the controlling shareholder of
Alliance Atlantis following the closing of the transaction (expected to
occur by summer 2007). It is intended that a reorganization of Alliance
Atlantis will take place to separate the businesses of the Company as
follows:
- upon receipt of CRTC approval, Alliance Atlantis' specialty
television business and CanWest's Canadian television business will
be managed on an integrated basis by CanWest and ultimately combined;
- it is intended that Alliance Atlantis' Motion Picture Distribution
business will be controlled by a Canadian partner of GS Capital
Partners; and
- it is intended that GS Capital Partners will own 100% of Alliance
Atlantis' financial interest in the highly successful CSI franchise.
As part of this new relationship with Goldman Sachs, CBS will assume
international distribution of CSI, CSI: Miami and CSI: NY.
The formal combination of the broadcast businesses will occur sometime
in 2011. The equity of each of CanWest and GS Capital Partners in the
combined entity will be determined by the EBITDA of the combined operation
at that time. There are a variety of customary liquidity mechanisms that
will be available to the parties following the combination.
"We are looking forward to this relationship with CanWest to support
the expansion of its television business and to facilitate the combination
of two great Canadian media companies," said Gerry Cardinale, a Managing
Director of GS Capital Partners.
CanWest was advised by Genuity Capital Markets and GS Capital Partners
was advised by Goldman, Sachs & Co. Alliance Atlantis was advised by RBC
Capital Markets.
This news release contains certain comments or forward-looking
statements that are based largely upon current expectations and are subject
to certain risks, trends and uncertainties. These factors could cause
actual future performance to vary materially from current expectations.
Factors that could cause actual events to vary from current expectations
include the right of the Board of Directors of Alliance Atlantis to
terminate the Arrangement Agreement in order to accept a superior proposal
to the Arrangement if the Acquisition Company fails to match the superior
proposal within 5 business days, subject to the payment by Alliance
Atlantis of a termination payment to the Acquisition Company in the amount
of CDN $65 million as well as a concurrent right of termination in favour
of the locked-up shareholders. The entities disclaim any intention or
obligation to update any forward-looking statement even if new information
becomes available as a result of future events or for any other reason.
CanWest Global Communications Corp. (http://www.canwestglobal.com), (TSX: CGS
and CGS.A, NYSE: CWG) an international media company, is Canada's largest
media company. CanWest is Canada's largest publisher of daily newspapers
and also owns, operates and/or holds substantial interests in conventional
television, out-of-home advertising, specialty cable channels, web sites
and radio stations and networks in Canada, New Zealand, Australia, Turkey,
Singapore, Indonesia, Malaysia, the United Kingdom and the United States.
Alliance Atlantis (http://www.allianceatlantis.com), (TSX: AAC.A and AAC.B)
owns 13 well-branded specialty channels boasting targeted, high-quality
programming. The company also co-produces and distributes the hit CSI
franchise and indirectly holds a 51% limited partnership interest in Motion
Picture Distribution LP, a leading distributor of motion pictures in
Canada, with motion picture distribution operations in the United Kingdom
and Spain.
Founded in 1869, Goldman Sachs is one of the oldest and largest
investment banking firms. Goldman Sachs is also a global leader in private
corporate equity and mezzanine investing. Established in 1991, the GS
Capital Partners Funds are part of the firm's Principal Investment Area in
the Merchant Banking Division. Goldman Sachs' Principal Investment Area has
formed 12 investment vehicles aggregating $35 billion of capital to date.
For more information, please visit http://www.gs.com/pia.
As previously announced, CanWest is hosting a conference call today,
January 10, 2007 at 5:00pm ET to discuss its first quarter financial
results for the 2007 fiscal year. This call will first address the
announcement of the acquisition agreement. Formal remarks and a question
and answer session will be hosted by Leonard Asper, CanWest President and
CEO with guest Michael MacMillan, Executive Chairman, Alliance Atlantis. To
access the teleconference, call 416-644-3414 or 1-800-733-7571. Accredited
analysts may ask questions on the call. All others are welcome to
participate in listen-only mode.
The call will also be available by webcast at http://www.canwest.com.
For a replay of the call, call 416-640-1917 or 1-877-289-8525 (Access
code 21211048, followed by the number sign.)
SOURCE CanWest Global Communications Corp.
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