February 20, 2010 / 1:07 AM / in 8 years

Judge allows Shaw bid for Canwest assets

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.

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

“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.

Counsel for the court monitor valued the Catalyst deal at some C$375 million in implied equity value, and said the Shaw deal was worth more than that.

Shaw said it also committed to acquire additional equity shares of the new Canwest at the same per share purchase price applicable to the minimum commitment, equal to total cash amounts paid to affected creditors who either are not permitted to or elect not to receive shares of the restructured Canwest, plus cash amounts paid to existing shareholders of Canwest.

The Canwest assets include the Global national television network and an assortment of specialty cable channels such as HGTV, Showcase and Fox Sports World.

Canwest financial adviser RBC Capital Markets picked Shaw’s bid as the best from a group that began with some 50 potential suitors and ended with two formal bids.

The Shaw deal is subject to a settlement with Goldman, which holds 65 percent of the assets and must agree to any restructuring plan for Canwest to emerge from creditor protection.

“Following successful completion of the recapitalization, it is intended that restructured Canwest will be de-listed from the TSX Venture Exchange and will apply to cease to be a reporting issuer under Canadian securities laws,” Shaw said.

Shares of Shaw rose 14 Canadian cents to C$20.08 on the Toronto Stock Exchange and gained 17 cents to $19.30 in New York. Canwest shares rose 1.5 Canadian cents to 16 Canadian cents on the TSX Venture Exchange.

Canwest’s extensive print assets are being auctioned off separately and are not included.

($1=$1.04 Canadian)

Reporting by Susan Taylor and Pav Jordan in Toronto; editing by Peter Galloway, Rob Wilson and Marguerita Choy

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