Shaw Communications explores selling ViaWest: sources

Fri Apr 28, 2017 6:05pm EDT
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By Liana B. Baker and John Tilak

(Reuters) - Shaw Communications (SJRb.TO: Quote) is looking for a buyer for ViaWest, the U.S. data center company it bought three years ago, according to people familiar with the matter, as the Canadian cable company continues to shed assets it considers non-core.

The sale of ViaWest would be Shaw's latest step to streamline its operations. Last year it sold its media assets to sister company Corus Entertainment Inc (CJRb.TO: Quote) for C$2.65 billion, and used some of the proceeds for its C$1.6 billion purchase of Wind Mobile.

Shaw is working with Toronto-Dominion Bank (TD.TO: Quote) on an auction for ViaWest, the people said on Friday, asking not to be identified because the matter is confidential. There is no guarantee a sale will occur, the sources added.

Shaw is hoping to fetch for ViaWest well over the $1.2 billion it paid to acquire it in 2014 from private equity firms Oak Hill Capital Partners and GI Partners, according to the sources.

Shaw declined to comment, while TD Bank did not immediately respond to a request for comment.

Analysts had been calling on Shaw to sell its data centers after U.S. telecommunications firms Verizon Communications Inc (VZ.N: Quote) and CenturyLink Inc (CTL.N: Quote) reaped several billions of dollars in sales after agreeing to sell their portfolios last year.

"ViaWest is an asset that has potentially material value but currently relatively low cash flow," Macquarie Research analyst Greg MacDonald said.

However, data center divestitures can also be challenging, because they involve separating assets that are deeply integrated into a telecommunications network. AT&T Inc (T.N: Quote), for example, scrapped an earlier plan to sell its data centers.   Continued...

A television cameraman is reflected on a television screen displaying the Shaw logo during the Shaw AGM in Calgary, Alberta, January 14, 2014. REUTERS/Todd Korol