Canwest sells shares of UTV

NEWS RELEASE

For Immediate Release
June 30, 2004

CanWest sells shares of Ulster Television Plc., (UTV) for £59 million sterling

Winnipeg: CanWest Global Communications Corp. announced today that its wholly owned subsidiary, CanWest International Communications Inc., has sold its holding of 15,763,545 million common shares of Ulster Television Plc., for £3.75 per share in a transaction effected through the London Stock Exchange. The cash proceeds from the transaction of approximately £59 million, (approximately C$145 million) will be used to reduce bank debt. CanWest will record a gain on the sale of the UTV shares of approximately $50 million.

"The sale of CanWest's shares in UTV is consistent with the previously stated intention of the Company to divest non-core, non-strategic assets. While valuable in its own right, CanWest's investment in UTV was no longer considered to be of strategic importance in terms of the Company's overall media strategy," said Leonard Asper, President and Chief Executive Officer, CanWest Global Communications Corp. CanWest acquired its interest in UTV in late 1997 and in the intervening period has received $33 million in dividends from UTV.

CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.S and CGS.A, www.canwestglobal.com <http://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, Web sites and radio networks in Canada, New Zealand, Australia, Ireland and the United Kingdom. The Company's program production and distribution division operates in several countries throughout the world.

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I'm wondering... who bought the shares of UTV?

ITV plc I hope...

Takeover bid coming?
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Ulster TV could be takeover target as 30% stake sold

UTV: possible takeover target
Staff, Brand Republic 11:00 01-07-2004
LONDON - Ulster Television, which earlier this year was in £400m takeover talks with SMG, could itself be a target after Canadian media group CanWest Global Communications sold its 30% stake in the ITV franchise for £59m.

The identity of the buyer of the 30% stake has not been revealed, sparking speculation that a takeover bid could be in the offing.

CanWest, Canada's largest publisher of daily newspapers, acquired its interest in UTV in late 1997 as part a strategy to build an Irish media business, which also includes a 45% stake in the Republic's TV3.

The TV3 stake will not be sold because, unlike with Ulster, Canwest has direct management input at the Irish station.

Leonard Asper, president and chief executive officer, said: "The sale of CanWest's shares in UTV is consistent with the previously stated intention of the company to divest non-core, non-strategic assets.

"While valuable in its own right, CanWest's investment in UTV was no longer considered to be of strategic importance in terms of the company's overall media strategy."

As well as major TV and newspaper interests in Canada, where it owns Global Television and the National Post, CanWest also has interests in TV stations in New Zealand, where it has stakes in TV3 and C4, and Australia, where it owns part of Network Ten.


Source: MediaBulletin

Apparently the sale was to 12 financial institutions.

No way I hope

That would probably have been a trade rather than a market sale, and with regulator pre-approval and carefull press handling.

Perhaps this is a share parking operation pending further consolidation, or even a speculative move by City investors. If ITV wanted any CanWest assets, then they may be more interested in their half of TV3 :

From the Sunday Tribune:

ITV passed on CanWest's UTV offer
Paul O'Kane

BRITISH television giant ITV plc spurned the chance to buy CanWest's 30% in Ulster Television, the Sunday Tribune has learned.

ITV plc, the new name for the merged Granada-CarIton television business, owns the vast bulk of the ITV network but has no shareholding or management role in its Northern Ireland affiliate UTV.

Senior CanWest executives contacted representatives of ITV plc in recent weeks and gave them first refusal on the Canadian company's 29.9% stake in UTV. ITV, which is CanWest's partner in TV3, passed on the opportunity and CanWest placed the stake with a number of institutional investors, raising £59m (€88m) in the process. About a dozen institutions are thought to have taken most of the stock in the placing, which was conducted at an 11% discount to the market.

The sell-off has surprised some UK media watchers. After the £5.8bn creation of ITV plc in February, it had been expected that the new company would move to mop up the remaining ITV licences that the company does not already own in Northern Ireland, Scotland and the Channel Islands.

Some sources suggested that ITV executives feel UTV's current share price is a little rich and may swoop for UTV at a later date. UTV may also have not have been overly receptive to ITV plc taking the 30% stake.

CanWest had never been granted board representation by UTV despite being its biggest shareholder in part because UTV executives view its TV3 as a key competitor. UTV is therefore unlikely to have welcomed ITV plc as a minority shareholder with open arms given that ITV also has a 45% stake in TV3 through its Granada subsidiary.