SBD/19/Franchises

LABATT FACES UNSOLICITED BUYOUT OFFER FROM ONEX CORP.

     Onex Corp., a Canadian investment firm and Quilmes
Industrial S.A., Argentina's largest brewer, "fired the first
shot" for John Labatt Ltd. yesterday by offering C$2.3B for the
beer and entertainment conglomerate.  Onex Chair Gerald Schwartz
"suggested he was prepared to raise his debt-propelled offer if
he finds Labatt is worth more."  Labatt, which controls close to
45% of Canada's domestic beer market, also owns European
breweries as well as up to C$1B-worth of sports and entertainment
properties, including  the Blue Jays, CFL Argonauts, SkyDome, and
The Sports Network (Marina Strauss, Toronto GLOBE & MAIL, 5/19).
          NO GO?:  Labatt President George Taylor has dismissed
the initial offer.  Taylor: "This is a wholly inadequate proposal
and does not reflect fair value to our shareholder."  Industry
analysts and market watchers said the bid "will have to be
higher" for a deal to be made.  David Cohen, an analyst with
Research Capital Corp., said the offer was "a little light
relative to what people expected relative to the value of
Labatt's assets."  Labatt's Board of Directors will meet today to
discuss the bid (Art Chamberlain, TORONTO STAR, 5/19).
     WITHER THE JAYS: Schwartz said he wanted to return Labatt to
its roots as a brewer and eventually sell its non-brewing assets
to pay for a leveraged buyout (Bertrand Morotte, CALGARY HERALD,
5/19).  But he also said Labatt's interest in the Blue Jays might
remain.  Schwartz: "[Baseball] is a business I don't understand,
and I would want to get advice from (Blue Jays President) Paul
Beeston. ... Obviously the Blue Jays are a great marketing
vehicle for Labatt" (John Saundes, Toronto GLOBE & MAIL, 5/19).
According to Bill Lankohf of the TORONTO SUN, potential suitors
for the team include:  Canwest Global; cable TV mogul and Sun
owner Ted Rogers; and the Bassett family, owners of CFTO and
Baton Broadcasting (TORONTO SUN, 5/19).
     TSN HOT?  One business executive: "The hot property is TSN.
Lots of people would like to buy into that.  I think you'll see
(Schwartz) lump some things like the Argos and Blue Jays with TSN
and try to sell it as a package" (TORONTO SUN, 5/19).  In
Toronto, Rob Longley writes that TSN's "profit picture has never
been rosier and therefore the network and its holdings ... have
never been more ripe for a sale."  If TSN is sold, Longley writes
that possible buyers include Molson, which last year was
unsuccessful in a bid for a regional sports network, and Canwest
Global, which is "becoming a bigger force in the broadcast
industry" (TORONTO SUN, 5/19).  Other possible buyers include
Astral Communications of Montreal, Alliance Communications of
Toronto, Telemedia of Montreal, Western International
Communications of Vancouver, Baton Broadcasting of Toronto,
CanWest Global Communications of Winnipeg, and News Corp.'s
Twentieth Century Fox.  One analyst pegs the value of Labatt's
broadcasting assets and TSN "at roughly $600 million" (Harvey
Enchin, TORONTO GLOBE & MAIL, 5/19).
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