Maclean Hunter Removes Obstacle to Rogers Takeover Bid, Explores Strategic Options

Strategic Insights -

Rogers Communications' bid to acquire Canadian publisher and cable television operator Maclean Hunter Ltd. has been made easier after the two companies reached an agreement on a block of 36.3 million shares owned by Maclean Hunter Holdings, a subsidiary of Maclean Hunter Ltd. However, Maclean Hunter is also exploring other strategic options, including spinning off its Canadian cable assets or forming alliances with third parties. The company's president and chief executive, Ron Osborne, stated that it was in the best interests of shareholders to remove the barrier to the takeover bid. Maclean Hunter is reviewing alternatives to maximize shareholder value, which may include a recapitalization of the company, sale of its Canadian cable television assets, and alliances with third parties.

Key Takeaways:

  • Maclean Hunter and Rogers Communications have agreed on the status of 36.3 million shares owned by Maclean Hunter Holdings, removing a barrier to the takeover bid.
  • The shares, representing 17% of Maclean Hunter Ltd.'s total shares, would have added to the bid price, which is likely to top $4 billion (Canadian), or about $3 billion in United States currency.
  • Maclean Hunter is also exploring alternative strategic options, including spinning off its Canadian cable assets, sale of its Canadian cable television assets, and forming alliances with third parties.
  • The company's president and chief executive, Ron Osborne, stated that removing the barrier to the takeover bid was in the best interests of shareholders.
  • Maclean Hunter serves 1.2 million cable subscribers in the United States and Canada and publishes 200 consumer and trade periodicals in 10 countries.
  • The company's stock closed down 75 cents a share today, to $16.75 (Canadian), on the Toronto Stock Exchange.

Statistics:

  • 36.3 million shares owned by Maclean Hunter Holdings, representing 17% of Maclean Hunter Ltd.'s total shares.
  • $4 billion (Canadian), or about $3 billion in United States currency, the likely bid price for Maclean Hunter Ltd.
  • 1.2 million cable subscribers served by Maclean Hunter in the United States and Canada.
  • 200 consumer and trade periodicals published by Maclean Hunter in 10 countries.

Sources:

  • Maclean Hunter Ltd. (Rogers removes a hurdle to bid for the owner of Maclean's magazine, John Pineau, Toronto Star, 20 Jul 1993)
  • Maclean Hunter Ltd. (Maclean Hunter removes 36.3 million shares from Rogers' bid for 11-Mar-1993 04:00 AM ET)
  • Maclean Hunter Ltd. (Maclean Hunter Hldgs to Hold 36.3 Mln Shrs Out of Rogers Bid, The Globe and Mail, 11 Mar 1993)