Bell Globemedia Makes Bid For Chum Ltd.
Posted July 12, 2006 12:00 pm.
This article is more than 5 years old.
The two companies announced the pending takeover Wednesday afternoon and before trading was halted on the Toronto Stock Exchange as rumours of the deal circulated CHUM had a market value of $904.3 million.
“We are able to make this premium offer because Bell Globemedia is clearly the most logical buyer of CHUM,” BGM president and CEO Ivan Fecan said.
“There is a unique strategic fit to our operations that can make the united company a stronger national champion in broadcasting. We intend to maintain and build the valuable CHUM brands and develop more opportunities for Canadian programming.”
BGM is offering CHUM shareholders premiums 50 percent above Tuesday’s closing price. CHUM still has the ability to accept a better offer if BGM doesn’t want to match it, but CHUM would have to pay a fee of $41 million to break free of the agreement.
The company’s founder and controlling shareholder Allan Waters died in December. Following his death his son, current chairman Jim Waters, said there were “absolutely no plans” to sell the company.
“In Bell Globemedia’s offer, we not only found value for shareholders, but confidence that we would be placing CHUM in the hands of an owner with the financial resources and track record to continue to grow and build on our collective legacy,” Waters stated.
CHUM owns 33 radio stations and 12 local TV stations including its flagship Citytv station in Toronto. It also has 21 specialty channels including MuchMusic, CP24, Space and Bravo. CHUM’s holdings also include the CHUMCity building on Queen Street West, which is home to the company’s major specialty channels.
Bell Globemedia owns the CTV broadcasting network and national newspaper the Globe and Mail, as well as 17 specialty channels including TSN, MTV and the Discovery Channel.
The proposed bid will come under heavy scrutiny by the Canadian Radio-television and Telecommunications Commission. Though there are no conflicts surrounding CHUM’s radio properties, there will be heavy concentration on the television side, and MuchMusic and MTV are direct competitors.
CHUM plans to cut nearly 200 full-time and 90 part-time jobs across the country as it restructures its television operations. One-hour evening newscasts in Calgary, Edmonton and Winnipeg will reportedly be trimmed down to daily half-hour news magazine shows under the agreement. Citytv Vancouver would stop its traditional newscasts and boost its Breakfast Television program.
On Wednesday BGM said CHUM’s A-Channel and Access Alberta stations in secondary markets
“will be divested, which would leave the combined conventional operations of BGM and CHUM with the same number of over-the-air networks as the principal competitor in most markets.”
