stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
Shaw seeks buyer for Corus to finance wireless expansion
space
space
By ANDREW WILLIS
  
  

Email this article Print this article
Wednesday, June 13, 2018 – Page B1

Shaw Communications Inc. is attempting to sell its stake in broadcaster Corus Entertainment Inc. as part of a strategy to build a war chest for expansion of its Freedom Mobile wireless network.

Shaw recently hired investment bank TD Securities Inc. to find a buyer for its 38-per-cent stake in television and radio station owner Corus, according to sources familiar with the Shaw's plans.

These sources say Shaw is shopping its Corus stake, currently worth approximately $540-million, to a list of dozens of potential buyers, with a focus on private equity funds and other deeppocketed investors that don't currently own a national media business in Canada.

Toronto-based Corus owns a stable of 44 specialty television channels, including the Food Network and HGTV, and 15 conventional TV stations, including the national Global TV network, along with 39 radio stations. Sources say Shaw and Corus would listen to offers for individual business lines and that Shaw would also be content to continue as a major shareholder in Corus if no buyers emerge.

Spokespeople for Shaw, Corus and TD declined to comment.

Shaw is attempting to sell Corus at a time when the broadcaster's revenue is falling, partly because of shrinking audiences and advertising for conventional TV. Corus is expected to cut its $1.14 annual common share dividend when the company reports financial results later this month. The dividend currently sends $90-million annually to Shaw Communications.

Both Shaw and Corus are ultimately controlled by the Shaw family of Alberta. Sources say the Shaw family and Shaw Communications are attempting to sell both the voting and non-voting Corus stock, putting the entire company in play.

Shaw acquired the majority of its stake in Corus in April, 2016, when it sold media assets to the company, including the Global networks, and a lock-up agreement on the shares expired in April of this year. In a recent report, Barclays Capital Inc. analyst Phillip Huang said: "On the potential sale of the Corus stake, [Shaw] management said it was never their intention to hold it in perpetuity, but they have no urgent cash needs."

The bulk of Canada's TV and radio stations are controlled by four major companies - Shaw and telecom rivals BCE Inc., Rogers Communications Inc. and Quebecor Inc. While these companies are all expected to look at Corus, regulatory and competition concerns are seen standing in the way of a offer for the entire business.

Last month, the federal Commissioner of Competition blocked the proposed sale of two Corus-owned specialty television channels - French-language offerings Historia and Séries+ - to BCE subsidiary Bell Media Inc.

These regulatory issues would become even more daunting if a rival were to attempt acquiring all of Corus's businesses.

Shaw Communications' roots are in cable and the company made a major strategic shift in 2015 by jumping into wireless, acquiring what's now branded as Freedom Mobile for $1.6-billion.

Freedom currently has 1.3 million subscribers and Shaw could more than double its wireless reach to three million customers over the next decade with an aggressive expansion strategy, according to analysts.

The cost of that campaign will be significant. Shaw spent $173million upgrading its wireless network though the first six months of the year, a 47-per-cent increase in capital spending over the previous year, and faces an ever-increasing need for cash as the industry prepares to roll out ultra-fast 5G wireless networks.

"Wireless and telecom is a game of giants, so the last thing you want is a balance sheet that gives any doubt about your ability to finance what needs to be built," said an executive familiar with Shaw. He said the company is in an arms race with regional rival Telus Corp., upgrading to compete and spending billions to run fibre to the homes of customers, in addition to spending on wireless.

Cable industry pioneer JR Shaw founded Corus in 1999 and his family maintains control through a trust that owns 85 per cent of the media company's voting shares. In addition, Shaw Communications owns 80.6 million non-voting Corus shares.

Corus stock has performed poorly over the past three years, declining steadily from $20 levels to close Tuesday at $6.80, as viewers watched less conventional TV and were able to select smaller pay TV packages with fewer specialty channels. Corus has a $1.4billion market capitalization and $2.1-billion of long-term debt.

However, private equity funds may be attracted to the fact that Corus generated $293-million in free cash flow last year. Private equity buyers would face minimal regulatory issues if they attempted to acquire Corus.

If Shaw and Corus are willing to break up the media company to entice buyers, sources say regional companies such as the the Jim Pattison Broadcast Group LP would likely be bidders on assets such as its network of radio stations.

Maureen Chant, a spokeswoman for the Jim Pattison Group in Vancouver, declined to say whether there had been any discussion regarding Corus assets.

"If they call us, we'll talk to them," Ms. Chant said.

CORUS ENTERTAINMENT (CJR.B)

CLOSE: $6.80, UP 3¢

SHAW COMMUNICATIONS (SJR.B)

CLOSE: $27.54, UP 41¢


Huh? How did I get here?
Return to Main Murray_Campbell Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page