Quebecor is pushing lenders to accept a significant reduction on loans to Corus as it seeks to acquire the media company’s television and radio assets.
The Montreal-based company is urging banks to write off more than 60% of Corus’ $1.05 billion debt as part of a pre-takeover restructuring, reports the Globe and Mail, citing sources including analysts, investment bankers and media industry executives. Corus is struggling hard financially and it seems now is the time for a leveraged takeover bid.
Quebecor first approached Corus in January. The telecom and media giant aims to acquire Corus, parent of the Global Television Network, which includes streaming service Stack TV, if lenders agree to a debt reduction.
However, Corus’ lenders, led by RBC and TD, have extended the deadline for reaching a debt relief agreement to October 15.
Analysts suggest Quebecor could be the only bidder for Corus, as competitors Bell and Rogers are focused on expanding its cellular and internet networks. Sources speaking to the Globe say Bell and Rogers signed NDAs with Corus earlier this year to review its operations, but then decided to walk away.
“We don’t see many potential acquirers for Corus at this stage,” said Scotiabank analyst Maher Yaghi.
The acquisition could help Quebecor market its recently acquired Freedom Mobile service nationally, but analysts question the long-term value of traditional TV assets amid declining viewership (most watch streaming nowadays) and shifting ad revenues.
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Shaw/Rogers got to look at the books of Corus, and were glad that they sold Global TV and the specialty channels eight years ago.
Corus lost the rights to a number of their most popular streaming channels to Rogers, effective this coming January. Also, US-based Bravo has gained access to the Canadian market, so there's that as far as some reality shows are concerned. Hard to see what will be left of the Global streaming channel or their StackTV come 2025. Also, Corus drove Canadian animation studio powerhouse Nelvana into the ground. Quebecor may be hoping for a fire sale, but little incentive for banks not to get what they are owed.