Catalyst's offer allocates $50 million in value to minority shareholders
TORONTO, March 1, 2016 /CNW/ - As momentum builds for The Catalyst Capital Group Inc.'s ("Catalyst") campaign to stop Corus Entertainment Inc.'s ("Corus") (TSX: CJR.B) highly dilutive and overpriced acquisition of Shaw Media Inc. ("Shaw Media"), Catalyst is filing a proxy circular and making a new proposal to backstop a $263 million rights offering of subscription receipts to be allocated to the minority shareholders voting on the Corus-Shaw Media deal. The Catalyst-backed rights offering improves the economics for all minority voting shareholders – even those who do not subscribe to buy subscription receipts.
The Catalyst-backed rights offering ("Rights Offering") would be available to all minority shareholders voting on the Corus-Shaw Media deal ("Minority Voting Shareholders") on a pro-rata basis without any fee and under the same economic terms as those outlined in the final short form prospectus for Subscription Receipts dated January 27, 2016. Under the Rights Offering for $9.00 per subscription receipt, each minority voting shareholder will receive one share. Catalyst estimates that its proposal provides a benefit to a subscribing minority voting shareholder of approximately $1.76 per subscription right based on the February 29, 2016 closing price.
Catalyst will also pay, subject to compliance with applicable law, a fee of $0.30 per subscription right to any minority voting shareholder who decides not to exercise its right to participate in the Rights Offering. Catalyst will in turn exercise such subscription right in order to provide Corus with equivalent funding to the proceeds from the $263 million Subscription Rights offering of January 27, 2016
The value allocated under Catalyst's Rights Offering to minority voting shareholders is estimated at $50 million. The Rights Offering is also estimated to save Corus $5 million in fees.
Catalyst has in excess of $6 billion of assets under management and has significant committed undrawn amounts available to it well in excess of the amount necessary to underwrite such a Rights Offering.
The full letter and proxy circular are available at www.StopCorusShaw.ca.
"As a Corus shareholder, we have been overwhelmed with support from other minority shareholders concerned about the lack of transparency, process and valuation that have led Corus to significantly overpay for Shaw Media," said Gabriel de Alba, Managing Director and Partner of Catalyst. "Corus's proposed deal is good for the Shaw family but bad for Corus minority shareholders. It was created by the Shaw family for the Shaw family, and dilutes minority shareholders for its own benefit."
"As Catalyst is Canada's second-largest independent private equity firm, we are able to allocate our capital to support the Rights Offering and give minority shareholders the ability to participate in the very favorable terms of the receipts offering and obtain a gain comparable to the Shaw family's Private Placement. We will continue to put our money where our mouth is to protect minority shareholder interests. We are voting NO to the Corus-Shaw deal as it is detrimental to minority shareholders and encourage you to do the same."
Catalyst's analysis, based on Corus' disclosures, reveals that Corus is overpaying for Shaw Media by up to $858 million and paying excessive fees. For the benefit of minority shareholders, Catalyst is calling for a fair allocation of the funding opportunities to all shareholders, not only to the Shaw family. Catalyst is also advocating a reduction of the Shaw Media acquisition price.
Shareholders are urged to VOTE AGAINST the Acquisition Resolution. Your vote is important, regardless of how many shares you own.
For questions or assistance, please contact Kingsdale Shareholder Services, at 1-866-851-2484 toll-free in North America, or 1-416-867-2272 outside of North America (collect calls accepted), or by e-mail at [email protected].
About The Catalyst Capital Group Inc. (www.catcapital.com)
The Catalyst Capital Group Inc., a private equity investment firm founded in June 2002, is a leader in distressed-for-control investing. The firm's mandate is to manufacture risk adjusted returns, in keeping with its philosophy of "we buy what we can build." Catalyst's Guiding Principles of investment excellence through superior analytics, attention to detail, intellectual curiosity, team and reputation are key to the firm's success. The Catalyst team collectively possesses more than 110 years of experience in restructuring, credit markets and merchant and investment banking in both Canada and the United States.
SOURCE Catalyst Capital Group Inc.
For further information: MEDIA ENQUIRIES: Daniel Tisch, Argyle Public Relationships, Direct: (416) 968-7311, ext. 223, [email protected]; INVESTOR ENQUIRIES: Ian Robertson, Kingsdale Shareholder Services, Direct: 416.867.2333, Cell: 647.621.2646, [email protected]