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OTPP Deals Toronto Sports Empire

(Reuters) – Ontario Teachers’ Pension Plan has reached a deal to sell its 80 percent stake in the owner of the NHL’s Toronto Maple Leafs and the NBA’s Raptors to Rogers Communications Inc and BCE Inc for C$1.3 billion ($1.28 billion), a newspaper reported on Friday.

Citing unnamed sources close to the situation, the Globe and Mail said the preliminary deal to sell control of Maple Leaf Sports and Entertainment to Rogers and Bell Canada parent BCE has the support of Larry Tanenbaum, who owns the remaining 20 percent. Tanenbaum has the right of first refusal on any offer.

In September, Teachers, one of Canada’s largest pension fund managers, acquired TD Capital’s minority stake in MLSE for an undisclosed sum, boosting its interest to 80 percent from about 66 percent.

Many speculated that the move, which raised its stake in the group to roughly 80 percent, was aimed at ultimately improving its chances of completing a sale of its entire holding.

MLSE owns the National Hockey League’s Toronto Maple Leafs, the National Basketball Association’s Raptors and the Air Canada Centre, the downtown arena in which the two teams play. It also has other sporting franchises, and related broadcasting assets and property.

The franchise had reportedly caught the interest of strategic and private equity players, drawn to the big revenues generated by the Maple Leafs, and to a lesser extent by the Raptors, even though both teams have failed to reach the playoffs in recent years.

Rogers Communications, Canada’s biggest wireless company and owner of the Toronto Blue Jays baseball club, has been linked to a possible deal for MLSE since December last year.

MLSE said it plans to make a major announcement later on Friday morning.

Teachers, BCE and Rogers could not be reached immediately for comment.

($1 = 1.0166 Canadian dollars)

(Reporting By Frank McGurty and Euan Rocha; editing by John Wallace)