The Asper family, founders of Canada-based media company Canwest Global Communications Corp, is challenging the proposed takeover of the business by family-controlled media giant Shaw Communications Inc.
According to Canadian media reports, a group of Canwest shareholders, including the Asper family and several US investment funds, sent a letter to Canwest and its court appointed monitor stating it intends to oppose the $2 billion takeover bid made by Shaw in May. (Continue reading here)
The shareholder group oppose the deal on the basis that it will receive nothing from the takeover, as the money will be used to repay debts and the Goldman Sachs Group.
"There simply has not been a vigorous and lengthy solicitation process, nor a thorough canvass of the market with respect to 100% of the equity of Canwest and it is therefore neither possible nor fair to conclude that there is no remaining value for existing Canwest equity holders," the letter said.
The shareholders instead propose an open auction of the Canadian media company for its assets.
Canwest was founded in 1974 by Izzy Asper, who built the media empire along with his son Leonard. However, the pair overstretched themselves with acquisitions including the $3.2 billion purchase of Southam newspaper chain, saddling the company with an unmanageable debt. This, combined with the onset of the economic crisis, led Canwest to file for bankruptcy in 2009.
Shaw Communications, also based in Canada, is currently headed by third-generation Jim Shaw, who has expanded the family cable business into a media giant with 2009 revenues of $3.4 billion.
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