Despite vigorous opposition from a dissenting shareholder, Corus Entertainment Inc. class B shareholders on Wednesday voted 78.52 percent to proceed having a $2.65-billion purchase of Shaw Media Inc. from Shaw Communications Inc.
The proposed transaction, which was announced Jan. 13, remains subject to approval by Canada’s broadcasting regulator. Corus has previously said hello wishes to close the deal in the third quarter, which ends up May 31.
“Corus’s shareholders have spoken, voting towards this transformational acquisition,” said Doug Murphy, president and chief executive of Corus Entertainment. “This endorsement is a critical step forward in bringing these two great companies together to create a leading integrated media and content company.”
Catalyst Capital Group Inc., a Corus shareholder in opposition to the transaction, on Monday failed to convince the Ontario Securities Commission to delay Wednesday’s vote. Catalyst, an activist investment fund which owns about 0.4 per cent of Corus shares, has complained the financial disclosure provided in advance of the vote was inadequate.
Speaking to reporters after the vote, Gabriel de Alba, managing director of Catalyst, said the sale process lacked transparency and really should happen to be opened up so other media companies or strategic bidders could have participated. An open auction would have provided more certainty for the sale price, he explained.
“You can see that the questions and concerns that Catalyst raised have resonated over the minority shareholders. One inch four of those minority shareholders have sided with Catalyst,” de Alba said.
“Catalyst will continue to be progressive in the fight to ensure that minority rights are respected and also to make sure that management delivers on answers and performance.”
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Both Shaw and Corus are controlled through the Shaw family from Calgary. The offer is designed to reorganize all the Shaw family’s media assets underneath the Corus brand.
The transaction moves the worldwide TV network and several specialty channels, for example Food Network Canada and HGTV, towards the Corus portfolio, which already includes several media properties, included in this specialty channels Cartoon Network, CMT and Disney Channel and 39 radio stations.
The sale remains susceptible to the approval from the Canadian Radio-television and Telecommunications Commission, which regulates ownership of broadcasting licences in Canada.
Shaw Communications really wants to exit the media business and concentrate on providing cable tv, phone and Internet services. Shaw has been expanding its footprint in wireless communications, recently completing its previously announced $1.6-billion purchase of carrier Wind Mobile Corp.
Fernand Blisle, lead independent director of Corus, chaired Wednesday’s meeting at Corus Entertainment’s headquarters on Toronto’s lake front.
Some 443 shareholders holding 61.8 million from the Class B shares either attended the meeting or voted by proxy. Seventeen shareholders holding 3.26 million Class A shares attended the meeting. People who voted the category A shares supported the deal unanimously.
The Shaw family members have said hello supports the transaction, but under regulatory rules which are supposed to protect minority shareholders in related-party transactions, the family’s holdings were excluded from Wednesday’s vote. The vote required majority support of both classes of shares, not including those shares held by the Shaw family.
Financial Post
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