CanWest Global Communications and Goldman Sachs Capital Partners acquire Alliance Atlantis Communications for USD 1.96bn

anWest Global Communications and GS Capital Partners, a private equity affiliate of Goldman Sachs, said a new acquisition company will acquire Alliance Atlantis Communications. The new acquisition company will acquire all of its outstanding class A voting and class B non-voting shares at a purchase price of CAD 53.00 per share in cash for an aggregate price of CAD 2.3bn 9USD 1.96bn).
"Today's transaction is consistent with CanWest's strategy to enhance its existing television business and expand its presence in the fast growing specialty television sector," said Leonard Asper, President and CEO of CanWest. "The combined expertise of CanWest and Alliance Atlantis will enable us to produce even better Canadian content, promote it more effectively, and provide greater access to more viewers across more platforms. We are thrilled to be working with Goldman Sachs to effect this strategic transaction."
The acquisition of Alliance Atlantis is to be carried out by way of a statutory Plan of Arrangement. The newly formed acquisition company is an indirect wholly-owned subsidiary of CanWest. The Arrangement requires a vote by Alliance Atlantis' Class A voting and Class B non-voting shareholders at a meeting of shareholders, which is currently expected to be held in the spring of 2007. Shareholders representing approximately 80% of the Class A voting shares, have agreed to vote their shares of Alliance Atlantis in favour of the shareholders' resolution approving the Arrangement.
The Arrangement is also subject to court approval as well as certain other customary conditions, including the receipt of regulatory approvals. Pending approval from the Canadian Radio-television and Telecommunications Commission ("CRTC") for the change of ownership and transfer of control of the specialty television channels, the securities of the relevant regulated entities will be deposited with a trustee pursuant to a voting trust agreement approved by the CRTC.
A special committee of the board of Directors of Alliance Atlantis, comprised of Robert Steacy (Chair), Barry Reiter and Anthony Griffiths (the "Special Committee"), has reviewed the plan of arrangement in consultation with its legal and financial advisors. The special committee unanimously recommends the plan of arrangement to the company's board of directors, and the board of directors unanimously recommends (with one director recusing himself due to conflict) that shareholders vote in favour of the Arrangement. RBC Capital Markets has provided an opinion to the board indicating that, as of the date of such opinion, the consideration under the plan of arrangement is fair from a financial point of view to the shareholders.
A CanWest-controlled company will be the controlling shareholder of Alliance Atlantis following the closing of the transaction (expected to occur by summer 2007). It is intended that a reorganization of Alliance Atlantis will take place to separate the businesses of the Company as follows: upon receipt of CRTC approval, Alliance Atlantis' specialty television business and CanWest's Canadian television business will be managed on an integrated basis by CanWest and ultimately combined; it is intended that Alliance Atlantis' Motion Picture Distribution business will be controlled by a Canadian partner of GS Capital Partners; and it is intended that GS Capital Partners will own 100% of Alliance Atlantis' financial interest in the highly successful CSI franchise.
As part of this new relationship with Goldman Sachs, CBS will assume international distribution of CSI, CSI: Miami and CSI: NY.
The formal combination of the broadcast businesses will occur sometime in 2011. The equity of each of CanWest and GS Capital Partners in the combined entity will be determined by the EBITDA of the combined operation at that time. There are a variety of customary liquidity mechanisms that will be available to the parties following the combination.
CanWest was advised by Genuity Capital Markets and GS Capital Partners was advised by Goldman, Sachs & Co. Alliance Atlantis was advised by RBC Capital Markets.