Catalyst’s opposition to Corus-Shaw Media deal questioned by investors, analysts

The motives fuelling a minority shareholder’s make an effort to thwart Corus’s $2.65 billion purchase of Shaw Media were called into question Friday, as Catalyst Capital Group Inc. aired its concerns about the proposed sale on the conference call with investors and analysts.

Catalyst, a personal equity firm with US$6 billion in assets that are experts in distressed situations, said its only objective would be to maximize the worth of those minority shares. The company says it owns no other position attached to the transition, apart from class B shares of Corus.

Catalyst has argued that Corus is overpaying for Shaw Media up to $858 million. The private equity firm is looking for that March 9 vote to be postponed, for more disclosure and the ability to ask questions directly of the Shaw family, which controls both Corus and Shaw Media’s parent company, Shaw Communications Inc.

“We have obtained extraordinary support from fellow shareholders,” said Gabriel de Alba, managing director and partner at Catalyst. He didn’t name any investors but said that some were large ones, which the momentum behind their cause has grown within the last 24 hours. “They’ve seen the same concerns that Catalyst has highlighted related to both valuation and reporting,” he added.

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But the broader market appears perplexed through the assault by Catalyst, that has long employed combative strategies simply purchasing large stakes as a creditor. Now, Catalyst claims to be fighting for the little guy who, it contends, is assuming more risk and it has seen his position become depressed and diluted.

Late in the 50-minute call, one person asked if de Alba would address what he described as “an elephant within the room,” referring to Catalyst’s bitter feud with private equity firm West Face Capital Inc., a trader in Wind Mobile Corp, which Shaw has proposed to purchase for $1.6 billion. Senior managers at Shaw asserted they plan to make use of the arises from the Shaw Media sale to invest in their December acquisition of Wind.

West Face bought a 35.42 percent stake in Wind as a member of a consortium of investors that purchased the carrier in September 2014 from the former foreign owner, VimpelCom Ltd., for an estimated $300 million.

In a lawsuit weaving its way through the courts, Catalyst had alleged that West Face secured its ownership stake in Wind by obtaining and taking advantage of confidential information that belonged to Catalyst, which in fact had been pursing Wind. Now, West Face stands to create lucrative returns with money paid by Corus.

“What you’re describing is really a beautiful soap opera” that should be “released on a women’s TV channel,” de Alba said in response to the question.

“That’s just a fantastic story which has absolutely nothing to do