A judge has approved the sale of Canwest Global Communications Corp.’s TV business to Shaw Communications Inc. with a last-minute $11-million payout to a group of shareholders led by former Canwest CEO Leonard Asper, a spokesman for the ad hoc shareholders' committee told QMI Agency Wednesday.
Justice Sarah Pepall approved the amendments, including the $11-million cash payment to Asper’s dissenting group.
Canwest’s founding Asper family will get 48% of that money.
“I am able to stand here and tell you that we are supported by all parties for the relief we're seeking today,” Canwest lawyer Lyndon Barnes said.
The payment is equal to the 2.3% equity interest for existing shareholders and non-secured creditors that was taken off the table when the Shaw purchase offer changed from 20% of the company to 100% after co-investor New York-based Goldman Sachs was pushed off the sale.
In May, Calgary-based Shaw agreed to purchase all of Canwest's broadcast business, including Global TV, HGTV and Slice, for $2 billion.
A group of disgruntled shareholders complained the deal didn’t get a fair price and was designed simply to pay off bondholders. Retirees, shareholders and suppliers were cut short, Asper recently told QMI Agency.
Even the most conservative estimates peg the Winnipeg-based company’s worth at $2.3 billion, Asper said.
Pepall, who has been overseeing Canwest’s court-directed creditor protection, called the squabble over the terms of the sale “ridiculous” and sent lawyers for Canwest and the ad hoc committee of noteholders behind closed doors to reach an agreement early Tuesday morning. Talks ran until 2 a.m. and resumed Wednesday morning.
The revised Shaw deal will see US$440 million go to bondholders while C$38 million will be set aside for all other unsecured creditors. Those sums are separate from the $11 million paid to the shareholders group.
On Friday, Pepall approved the purchase of Canwest’s newspaper division, which includes the Montreal Gazette and National Post newspapers, to a group of bondholders led by National Post publisher Paul Godfrey for $1.1 billion.
No dissenters were present.
“Unlike the sister restructuring of the (newspaper division), this CCAA proceeding has experienced problems,” Pepall said, referring to the objection to the original deal by Goldman and the latest dispute with the shareholder group.
The final deal “is fair and reasonable,” Pepall said.
Canwest put its newspaper and television businesses up for sale earlier this year after being forced to file for bankruptcy protection following an aggressive expansion plan that racked up billions in debt.
Creditors will meet on July 19 to vote on the deal. The company will then need approval from the Canadian Radio-television and Telecommunications Commission and from the Competition Bureau before it can emerge from restructuring.
