Corus Entertainment Inc shareholders approve $2.65 billion deal to buy Shaw Media Inc

Despite vigorous opposition from a dissenting shareholder, Corus Entertainment Inc. class B shareholders on Wednesday voted 78.52 percent to proceed with a $2.65-billion acquisition of Shaw Media Inc. from Shaw Communications Inc.

The proposed transaction, that was announced Jan. 13, remains susceptible to approval by Canada’s broadcasting regulator. Corus has previously said hello wishes to close the offer in the third quarter, which ends up May 31.

“Corus’s shareholders have spoken, voting towards this transformational acquisition,” said Doug Murphy, president and chief executive of Corus Entertainment. “This endorsement is really a critical advance in bringing these two great companies together to produce a leading integrated media and content company.”

Catalyst Capital Group Inc., a Corus shareholder opposed to the transaction, on Monday failed to convince the Ontario Securities Commission to obstruct Wednesday’s vote. Catalyst, an activist investment fund which owns about 0.4 per cent of Corus shares, has complained the financial disclosure provided in advance of the vote was inadequate.

Speaking to reporters following the vote, Gabriel de Alba, managing director of Catalyst, said the sale process lacked transparency and should have been opened up so other media companies or strategic bidders might have participated. A wide open auction would have provided more certainty for that sale price, he explained.

“ the questions and concerns that Catalyst raised have resonated across the minority shareholders. One inch four of these minority shareholders have sided with Catalyst,” de Alba said.

“Catalyst will continue to be progressive in the battle to make sure that minority rights are respected and to make sure that management delivers on answers and gratifaction.”

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Both Shaw and Corus are controlled through the Shaw family from Calgary. The offer is designed to reorganize all of the Shaw family’s media assets underneath the Corus brand.

The transaction moves the worldwide TV network and many specialty channels, such as Food Network Canada and HGTV, towards the Corus portfolio, which already includes several media properties, included in this specialty channels Cartoon Network, CMT and Disney Channel and 39 radio stations.

The sale remains subject to the approval of the Canadian Radio-television and Telecommunications Commission, which regulates ownership of broadcasting licences in Canada.

Shaw Communications really wants to exit the media business and focus on providing cable tv, phone and Internet services. Shaw has been expanding its footprint in wireless communications, recently completing its previously announced $1.6-billion acquisition of carrier Wind Mobile Corp.

Fernand Blisle, lead independent director of Corus, chaired Wednesday’s meeting at Corus Entertainment’s headquarters on Toronto’s lake front.

Some 443 shareholders holding 61.8 million of the Class B shares either attended the meeting or voted by proxy. Seventeen shareholders holding 3.26 million Class A shares attended the meeting. People who voted the class A shares supported the offer unanimously.

The Shaw family has said it props up transaction, but under regulatory rules which are designed to protect minority shareholders in related-party transactions, the family’s holdings were excluded from Wednesday’s vote. The vote required majority support of both classes of shares, excluding those shares held by the Shaw family.

Financial Post

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