TORONTO, March 4 (Reuters) - Canadian fund Catalyst Capital, which has been critical of Corus Entertainment Inc’s C$2.65 billion acquisition of Shaw Communication’s media assets, on Friday issued an open letter calling on the Shaw family that controls both entities to prove that the asset was sold in a fair, competitive process.
Catalyst, which contends that Corus is overpaying for Shaw’s media assets, called on the family to prove that Shaw ran a sale process and disclose the number of offers and the price ranges of the offers it received.
“As the deal is a related party transaction, minority shareholders in both Corus and Shaw are entitled to know the asset was sold via a fair, competitive process - not a closed process in which Corus was forced to bid against itself,” said Catalyst in the statement.
The letter is the latest in an escalating war of words between the two sides about the merits of the acquisition.
Corus has said Catalyst’s claims are misleading and argued it is paying a fair price for the asset. It has said the deal is a “heavily negotiated transaction conducted by two large, sophisticated and thoroughly advised public companies.”
Well-known proxy advisory firms ISS and Glass Lewis have advised shareholders to back the transaction.
ISS in a note to its clients this week said that although the points raised by Catalyst may have some merit, they have not challenged the strategic merits of the transaction.
“Without any other certain, potentially superior strategic alternative in hand which would be widely accepted by market participants, defeating this transaction would simply block shareholders from benefiting from the strategic opportunities it presents,” ISS said.
A Corus shareholder vote on the matter is set for March 9. The transaction must win the approval of more than half Corus’ minority shareholders, given that it is a related-party deal. (Reporting by Euan Rocha and Alastair Sharp; Editing by Bill Trott)