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Television broadcasting industry

CanWest Global Communications Corp. Announces Takeover Bid for WIC Western International Communications Ltd.

Strategic Insights

— 2 min read

CanWest Global Communications Corp. has made a significant move in the Canadian broadcasting industry by announcing a takeover bid for WIC Western International Communications Ltd. The bid, valued at $636 million, sees CanWest offering $24 per share for all Class A Voting Shares and Class B Non-Voting Shares of WIC. This move is expected to create a third national force in Canadian broadcasting, positioning CanWest and WIC as a dominant player in the industry.

Key Takeaways:

  • CanWest Global Communications Corp. is making a takeover bid for WIC Western International Communications Ltd. at a price of $24 per share, which is expected to be mailed shortly.
  • The offer will be conditional on not less than two-thirds of each share class not already owned by CW Acquisition Inc. being tendered to the bid.
  • CanWest owns 2,285,200 Class B Non-Voting WIC Shares, approximately 9.7 percent of the outstanding Class B Non-Voting Shares.
  • Two WIC shareholders, who are also long-time independent Directors of WIC, have launched proceedings against WIC, Western Broadcasting and Cathton Holdings in the B.C. Supreme Court seeking a declaration that all Class B Non-Voting Shares are now convertible into Class A Voting Shares.
  • CanWest believes that the Class B Non-Voting Shares have indeed become convertible into Class A Voting Shares and intends to commence a separate court action seeking a declaration.
  • The takeover bid is not subject to CRTC approval, but shares taken up under the bid will be registered in the name of an independent trustee pending CRTC approval of the transfer of the shares to CW Acquisition Inc.
  • I.H. Asper, CanWest's Chairman and Chief Executive Officer, stated that CanWest and WIC are an "almost perfect fit" and would create a third national force in Canadian broadcasting.
  • Leonard Asper, Director of Corporate Development at CanWest, noted that CanWest would "not want to own shares in the competing CTV Network" and that the takeover bid would lead to operating costs efficiencies and a welcome re-balancing of the television industry in Canada.

Statistics:

  • The takeover bid is valued at $636 million.
  • CanWest owns 2,285,200 Class B Non-Voting WIC Shares, approximately 9.7 percent of the outstanding Class B Non-Voting Shares.
  • 2,285,200 Class B Non-Voting WIC Shares represent 9.3 percent of WIC's outstanding commons share equity.
  • The Class B Non-Voting Shares constitute 96.6 percent of the total equity of WIC on a fully diluted basis.
  • The Class A Voting Shares in aggregate represent only 3.4 percent of the total equity of WIC on a fully diluted basis.
  • Approximately 62 percent of the Class A Voting Shares and 4.1 percent of the Class B Non-Voting Shares of WIC are held by Western Broadcasting Ltd.
  • Approximately 29 percent of the Class A Voting Shares and 10.1 percent of the Class B Non-Voting Shares are held by Cathton Holdings Ltd.
  • CanWest's 9.3 percent equity position makes it WIC's second-largest shareholder.
  • There are approximately 26.5 million WIC shares outstanding.

Sources:

  • Nov. 13, 1995 press release from CanWest Global Communications Corp.
  • Business Wire press release #CAN-WE-213609, dated Nov. 13, 1995.
  • WIC's last proxy circular.
  • I.H. Asper quote, Business Wire press release #CAN-WE-213609.

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