Judge allows Shaw bid for Canwest assets

Fri Feb 19, 2010 8:47pm EST
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By Susan Taylor and Pav Jordan

OTTAWA/TORONTO (Reuters) - The broadcast arm of Canada's shell-shocked Canwest media empire is to be acquired by cable and telecom company Shaw Communications Inc, a judge ruled on Friday, after noteholders opposed a rival, eleventh-hour bid.

"I am going to grant the order," the judge told a packed courtroom after eight hours of intense hearings involving top global investors and key Canadian media personalities.

"The Ontario Superior Court of Justice has approved the previously announced subscription agreement entered into by Shaw with Canwest Global Communications Corp," Shaw said in a statement.

The ruling put a quick end to a last minute bid filed for the assets on Thursday night by a consortium led by private equity fund Catalyst Capital, and backed by Goldman Sachs, which offered C$120 million ($115 million) for the bankrupt television operation.

The Canwest media empire has struggled for survival after a rapid rise to glory trapped it under a massive debt load - some C$4 billion - forcing it to file for creditor protection for its television operations in October 2009.

That was only two years after sealing a C$2.3 billion deal with an affiliate of Goldman Sachs to acquire specialty-TV group Alliance Atlantis Communications, when Canwest gained such popular channels as Food Network Canada, History Television and HGTV Canada.

"Pursuant to the subscription agreement, Shaw has made a minimum commitment to acquire $95 million of Class A Voting Shares in the capital of Restructured Canwest, representing a 20 percent equity and 80 percent voting interest," the company said in a statement shortly after the ruling.

The agreement was entered into by Shaw, Canwest and certain 8.0 percent senior subordinated noteholders, represented by an Ad Hoc Committee that told the hearing on Friday that it would not back the Catalyst bid.   Continued...

<p>A Canwest sign is seen outside an office building in Toronto in this October 6, 2009 file photo. REUTERS/Mark Blinch</p>