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CanWest Launches IPO of Newspaper and Interactive Group
9 September 2005CanWest Global Communications Corp. ("CanWest")
announced today its intention of offering an interest in its Canadian
newspaper and interactive media businesses (with the exception of the National
Post) via an initial public offering ("IPO") in Canada structured as an income
fund. To that end, CanWest MediaWorks Income Fund (the "Fund") has filed a
preliminary prospectus with all securities regulatory authorities in Canada.
The newly-created Fund will, on completion of the offering, indirectly hold
through CanWest Mediaworks Limited Partnership (the "Partnership") an
approximate 28% interest in CanWest's Canadian newspaper and interactive media
businesses. Scotia Capital Inc. and RBC Capital Markets will co-lead a
syndicate of underwriters for the IPO and will act as joint book runners for
the transaction.
CanWest's Canadian newspaper operations include some of Canada's oldest
and most respected metropolitan daily newspapers -- including the Times
Colonist (Victoria), The Vancouver Sun, The Province (Vancouver), Edmonton
Journal, Calgary Herald, The StarPhoenix (Saskatoon), Leader- Post (Regina),
The Windsor Star, Ottawa Citizen and The Gazette (Montreal). These prominent
mastheads, including their online editions and classified web sites (such as
working.com and driving.com), together with Nanaimo Daily News, Alberni Valley
Times, the new free-distribution, youth-oriented Dose, 21 non-daily newspapers
distributed in various communities in B.C., and CanWest's investment in Metro
will form the main group of assets being taken to market in this transaction.
These operations will be joined by CanWest's Internet and electronic
publishing arm, which includes the internet portal canada.com, FP infomart.ca
and FP DataGroup.
Upon completion of the Fund's IPO, the net proceeds of the equity
offering, together with $830 million in cash from new term and revolving
credit facilities will be used by the Partnership to acquire these media
businesses from one of CanWest's subsidiaries, CanWest MediaWorks Inc. The
term and revolving credit facilities are part of a total $1 billion, 5-year
senior unsecured credit facility which will be available to the Partnership
and which has been underwritten by The Bank of Nova Scotia as lead arranger
and bookrunner and Royal Bank of Canada as syndication agent. CanWest
MediaWorks Inc. will use the proceeds from the sale to retire certain existing
debt.
"We have been considering this transaction for some time, as a way to
unlock, what we believe is significant shareholder value," said Leonard Asper,
CanWest's President and Chief Executive Officer. "We believe that this
offering will be well received by the investing public."
Concurrently with this announcement, CanWest MediaWorks Inc. announced
that it had initiated tender offers and consent solicitations for any and all,
of its 10 5/8% Senior Subordinated Notes due 2011 and 7 5/8% Senior Unsecured
Notes due 2013. In the aggregate, these notes have an outstanding principal
amount of approximately $744 million (US$625 million). As part of this tender
offer process, CanWest MediaWorks Inc. is seeking noteholders' consents to
amend certain provisions of these notes and related note indentures.
Completion of the IPO and spin out of its newspaper and online media
businesses is conditional upon successful completion of the tender offer and
consent solicitation process for these notes. CitiGroup Global Markets Inc.
has been retained as the dealer manager in respect of the tender offers.
Total proceeds from the sale to CanWest MediaWorks Inc. are expected to
be approximately $1.45 billion. These proceeds together with proceeds from a
new $500 million 5-year senior secured revolving credit facility which has
been underwritten by The Bank of Nova Scotia and Royal Bank of Canada will be
used to retire debt under existing senior credit facilities and fund the
tender offers and consent solicitations.
CanWest MediaWorks Inc. will retain 100% ownership of the National Post,
and its Canadian broadcasting and related operations. On completion of the
contemplated transactions, it will retain an approximate 72% interest in the
Partnership. It will also continue to hold all of CanWest's international
media businesses.
This news release contains certain comments or forward-looking statements
that are based largely upon the Company's current expectations and are subject
to certain risks, trends and uncertainties. These factors could cause actual
future performance to vary materially from current expectations.
The Fund's units have not been, and will not be, registered under the
United States Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or the availability of an
applicable exemption from the registration requirement of such Act. The Fund's
units are being offered in Canada only by means of the preliminary prospectus.
This news release does not constitute an offer to sell or the solicitation of
any offer to buy, nor shall there be any sale of the Fund's units in any
province, territory, state or jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of any such province, state or jurisdiction. This news release
is neither an offer to purchase nor a solicitation of an offer to sell notes
of CanWest MediaWorks Inc.
CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.SV and CGS.NV;
www.canwestglobal.com) is an international media company. CanWest, Canada's
largest publisher of daily newspapers, owns, operates, and/or holds
substantial interests in newspapers, conventional television, out-of-home
advertising, specialty cable channels, radio networks and web sites in Canada,
New Zealand, Australia, and the Republic of Ireland.
For further information: Geoffrey Elliot, Vice President, Corporate
Affairs, Tel: (204) 956-2025, Fax: (204) 947-9841, gelliot@canwest.com; or
John Maguire, Chief Financial Officer, Tel: (204) 956-2025,
Fax: (204) 947-9841, jmaguire@canwest.com
Source: NewsWire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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