Ontario Teachers to keep its Toronto sports empire

Fri Nov 25, 2011 4:20pm EST
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By Pav Jordan

TORONTO (Reuters) - The Ontario Teachers' Pension Plan has shelved plans to sell its 80 percent stake in Maple Leaf Sports and Entertainment Ltd, the "trophy asset" owner of Toronto's big-league hockey and basketball teams.

Teachers, one of Canada's largest pension fund administrators, began gauging the market for a sale of the stake in March, after several unsolicited expressions of interest.

"Teachers has concluded this eight-month process with the decision to maintain its stake in MLSE, which has been, and continues to be, a very successful investment," the pension manager said in a statement on Friday.

MLSE owns the National Hockey League's Toronto Maple Leafs, the National Basketball Association's Toronto Raptors and the Air Canada Center, the downtown arena in which the two teams play. Its stable includes several other sporting franchises and related broadcasting assets and property.

Industry observers were not surprised by the decision because of how well the asset has performed and because of a reduced pool of potential buyers in uncertain markets.

"It's a trophy asset," said David Rogers, a partner at Caledon Capital Management and the former head of private equity at the Ontario Municipal Employees Retirement System pension plan.

"It's a wonderful asset, generating great returns, and you'd only sell it if you felt you were getting a very fair price, or you felt the opportunity to put that money to work somewhere else was very positive."

The franchise had reportedly caught the interest of strategic and private equity players, drawn to the big revenues generated by the Maple Leafs, and to a lesser extent by the Raptors, even though both teams have failed to reach the playoffs in recent years.   Continued...