Corus rejects Catalyst’s critique of Shaw Media acquisition

Canadian media and content company Corus Entertainment Inc (TSX: CJR.B) said that claims by Catalyst Capital Group about the proposed $2.65 billion acquisition of Shaw Media Inc are “misleading”. Catalyst is reported to have said that the family controlling both Corus and Shaw Communications Inc, the seller of Shaw Media, stands to gain at least $50 million from the deal. Corus also criticized Catalyst’s calculation of Shaw Media’s fair market value, which suggested that Corus was overpaying for the asset. Catalyst, a Toronto-based private equity firm, is a minority investor in Corus.


Corus Rejects Misleading Claims by Catalyst

TORONTO, Feb. 23, 2016 /PRNewswire/ – Corus Entertainment Inc. (“Corus”) (TSX:CJR.B) wishes to respond to a recent newspaper report featuring a number of misleading claims by The Catalyst Capital Group (“Catalyst”) regarding Corus’ proposed acquisition of Shaw Media Inc. (“Shaw Media”), announced on January 13, 2016 (the “Acquisition”). A special meeting of shareholders (the “Meeting”) to consider the proposed $2.65 billion Acquisition, to be paid for with a combination of cash and the issuance of Class B shares to Shaw Communications Inc. (“Shaw”), is scheduled for March 9, 2016.

The Board of Directors of Corus approved the proposed Acquisition of Shaw Media following its acceptance of the unanimous recommendation of the Special Committee of independent directors of Corus (the “Special Committee”) and has recommended that shareholders of Corus vote in favour of the Acquisition.


The Corus acquisition of Shaw Media is a game-changing opportunity to generate long-term value for shareholders, while being immediately accretive on an earnings-per-share and free-cash-flow-per-share basis. The Acquisition, which will create a powerful, integrated media and content company with the scope and scale to compete effectively, is expected to provide Corus with the free cash flow to pay down its outstanding debt while maintaining Corus’ current dividend of $1.14 per Class B share.

The clear benefits of the Acquisition have been recognized by Institutional Shareholder Services (“ISS”), a leading independent proxy advisory firm which provides voting recommendations to institutional investors. ISS, in a report released on February 22, 2016, recommends that Corus’ shareholders vote FOR the Acquisition. In its recommendation, ISS concluded that “the strategic rationale behind the transaction appears appealing” and that “the offer consideration to be paid by Corus to Shaw appears fair for both parties.” A copy of the press release issued by Corus on the ISS report on February 22, 2016 is available at or

The ISS recommendation is consistent with the support of Corus’ minority investors, whose response to the transaction has been overwhelmingly positive. The feedback received by Corus management in meetings with more than 100 investors, including long-time shareholders with substantial positions, is that the price to be paid is reasonable and the strategic rationale is compelling.


Corus categorically rejects Catalyst’s deeply misleading allegations and wishes to correct a number of misstatements and inaccuracies in a recent newspaper report. In particular, Corus would like to highlight the following:

•The allegation that the Shaw family stands to gain between $50 million to $62 million from the transaction is unfounded. Catalyst alleges that the Family has gained $40 million from the relative fluctuations in the trading prices of the Corus and Shaw shares on the TSX since the announcement of the Acquisition. Obviously, the Family cannot predict, nor is responsible for, market fluctuations in the share prices of the two companies. Catalyst’s other allegations with respect to the balance of the gain are similarly without merit. The subscription receipt offering and the related Shaw family concurrent private placement, were both priced with our underwriters in the context of the market, following a full public marketing process, at a 3.6% discount to the closing price of the Class B shares on the Toronto Stock Exchange (“TSX”) the night before pricing. This is well within the acceptable range for public financings and was approved by the TSX on that basis. The Shaw family’s participation in the offering was an important demonstration of its commitment to the future of Corus. Contrary to Catalyst’s allegations, neither the subscription receipts nor the associated concurrent private placement were priced or completed before the Acquisition was announced.

•Catalyst’s “internal calculations” of the fair market value for Shaw Media appear to be based on flawed and ill-informed assumptions that are simply not credible. At the meeting between Catalyst and Corus management on February 16, 2016, Catalyst said that they had “calculated” that Corus was overpaying for Shaw Media by $150-$200 million. Corus was not provided with a written copy of the “calculation”. That number has since arbitrarily risen to $400-$600 million. Corus is confident in the independent formal valuation and fairness opinion provided by Barclays Capital Canada Inc., which determined the fair market value for Shaw Media to be in the range of $2.45-$2.85 billion, based on extensive analysis including discounted cash flow analysis and comparable precedent transactions in the broadcasting sector in Canada and the United States.

•Catalyst’s concerns over a reverse break fee, which they had previously characterized to Corus as “outrageous” and “highly illegal”, are unfounded and appear deliberately staged to generate confusion. If shareholders vote not to proceed with the transaction simply because they don’t like the deal, there is no break fee or expense fee payable to Shaw.

•The transaction governance process has been careful, diligent and thorough. A Special Committee of independent directors, with its own independent legal and financial advisors, was established to oversee and assess the merits of the transaction. The Special Committee met 28 times over the course of a rigorous, four-month negotiation process. As part of the oversight process, an independent formal valuation and two fairness opinions were obtained from leading financial institutions in support of a fair acquisition. Each of these supported the terms of the Acquisition. In sum, Corus stands behind both the robust process and the extensive disclosure provided to shareholders in related to the Acquisition.

While Corus has complete confidence in the benefits of the Acquisition, the process and the price, minority shareholders will have the final say. The transaction is subject to minority protections, as set forth in Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (MI 61-101), which requires approval by the “majority of the minority” of Class B shareholders. The Corus Board has recommended that Corus shareholders vote in favour of the Acquisition. For more information about the transaction and how to vote, please visit


This press release contains forwardlooking information and should be read subject to the following cautionary language:

To the extent any statements made in this report contain information that is not historical, these statements are forwardlooking statements and may be forwardlooking information within the meaning of applicable securities laws (collectively, “forwardlooking statements”). These forwardlooking statements may include, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook, including advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees, and can generally be identified by the use of the words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forwardlooking statements. Forward-looking statements include statements regarding the ability to complete the Acquisition and the anticipated timing of completion of the Acquisition, if at all, satisfaction of all conditions precedent to the transaction, statements regarding performance of the combined company, the benefits and costs of the transaction and the pro forma capitalization, business, operations, financial performance (including dividends, financial leverage and adjusted EBITDA) and cash flow profile of the combined company, the ability to realize synergies following closing in the time and manner anticipated, the receipt of proceeds of Corus’ financing arrangement and completion of the company’s planning financing transactions. Although Corus believes that the expectations reflected in such forwardlooking statements are reasonable, such statements involve risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forwardlooking statements, including without limitation factors and assumptions regarding completion of the transaction on terms set out in the share purchase agreement and in a manner consistent with management expectations, the timing of completion of the transaction, the ability to fulfill the conditions to closing of the transactions, the accuracy of management’s assessment of the effects of the completion of the acquisition, including the ability to generate synergies consistent with management expectations, maintenance by the Corus Board of Directors of the dividend on the Class B Non-Voting Shares at its existing level and the ongoing performance of the businesses of Corus and Shaw Media, market conditions, , and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: our ability to attract and retain advertising revenues; audience acceptance of our television programs and cable networks; our ability to recoup production costs, the availability of tax credits and the existence of coproduction treaties; our ability to compete in any of the industries in which we do business; the opportunities (or lack thereof) that may be presented to and pursued by us; conditions in the entertainment, information and communications industries and technological developments therein; changes in laws or regulations or the interpretation or application of those laws and regulations; our ability to integrate and realize anticipated benefits from our acquisitions, including the Acquisition and to effectively manage our growth; our ability to successfully defend ourselves against litigation matters arising out of the ordinary course of business; changes in accounting standards, our ability to execute strategic plans and changes to strategic plans, downgrades in our financial strength or credit ratings, volatility and correlation of equity and debt markets, interest rates, the failure to realize some or all of the expected benefits of the transaction and the market for subscription receipts and Class B Shares and the prices of subscription receipts and Class B Shares. Additional information about these factors and about the material assumptions underlying such forwardlooking statements may be found in our Annual Information Form and our management’s discussion and analysis which are available on Corus’ website at as well as on SEDAR. Corus cautions that the foregoing list of important factors that may affect future results is not exhaustive.

When relying on our forwardlooking statements to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise required by applicable securities laws, we disclaim any intention or obligation to publicly update or revise any forward looking statements whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.

About Corus Entertainment Inc.
Corus Entertainment Inc. is a Canadian-based integrated media and content company that creates, broadcasts, licenses and delivers content across a variety of platforms for audiences around the world. The company’s portfolio of multimedia offerings encompasses specialty television and radio with additional assets in pay television, television broadcasting, live events, children’s book publishing, children’s animation, animation software, and technology and media services. Corus’ television brands include ABC Spark, Cartoon Network (Canada), CMT (Canada), Cosmopolitan TV, Disney Channel (Canada), Disney Junior, Disney XD, Nickelodeon (Canada), OWN: Oprah Winfrey Network (Canada), Telelatino, TELETOON, Treehouse, W Network, YTV, Historia, La chaîne Disney, Séries+ and TÉLÉTOON. Its 39 radio brands include CKNW AM 980, Rock 101, Country 105, 630 CHED, Fresh Radio, JUMP! 106.9, Q107 and 102.1 the Edge. The company also owns Nelvana, an internationally renowned animation production company, Kids Can Press, Toon Boom and Quay Media Services. A publicly traded company, Corus is listed on the Toronto Stock Exchange (CJR.B). Experience Corus on the web at

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Photo courtesy of Corus Entertainment Inc