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Does Shaw have eyes for Corus?

In the wake of BCE's takeover of Astral Media is an acquisition of Corus by Shaw Communications inevitable?

Mar 20, 2012

by Max Fawcett

Does BCE’s takeover of Astral Media portend a similar move by Shaw Communications? That’s what one analyst seems to think. In a piece by Jonathan Ratner in the Financial Post, Canaccord Genuity’s Dvai Ghose is quoted as speculating that Corus Entertainment, the last specialty broadcaster in Canada, might be a target for Shaw. “He noted that Corus has the monopoly on Movie Central in Western Canada, Astral has the Movie Network monopoly in Central and Eastern Canada, while both own a solid list of specialty digital TV channels and radio stations,” Ratner writes.

Better still, the Shaw family controls both Shaw Communications and Corus, which means that it wouldn’t have to pay the CRTC’s 10 per cent change of control premium. The comparatively cozy relationship between Shaw and Corus (when compared to BCE and Astral) extends beyond their controlling shareholders, and includes a few joint partnerships such as the Food Network, which they co-own.

Those synergies don’t mean Shaw shareholders wouldn’t have to pay a premium for Corus, though. Ratner quotes Canaccord media analyst Aravinda Galappatthinge, who says the price tag on an all-stock deal for Corus could be $28. “Despite that a potential Shaw acquisition should not represent a change in control, and thus may warrant a lower premium, we do not believe that Corus can be taken out for much less than the multiples paid for Astral Media,” he says.





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