George Gillett Reaches Deal To Sell Canadiens To Molson Family

Molson Family Beats Out As Many As Seven Groups For Sale Of Canadiens

Canadiens Owner George Gillett has reached an agreement in principle to sell his 80.1% stake in the franchise, as well as complete control of Bell Centre and Gillett Entertainment Group, to a consortium headed by the Molson family. The agreement still needs to be finalized and approved by the NHL BOG, and is expected to close in late August. Terms of the deal were not announced (Canadiens). In Montreal, Pat Hickey reported it is "believed the winning bid could be as high" as $550M (all figures U.S.). Canadiens VP/Communications & Community Relations Donald Beauchamp: "There are still a lot of details that have to be hammered out." Beauchamp added that a news conference to introduce the new ownership is "on hold until all the details are finalized," which could take "several months." While as many as "seven groups expressed interest in buying the team, the final bidding" was between the Molsons and a group led by Quebecor Media Inc. President & CEO Pierre Karl Peladeau. The Molson group is led by brothers Geoff, Andrew and Justin, and while there was "no immediate indication of the other members" of the ownership group, it could include former Canadiens GM Serge Savard, who "dropped his own bid when the Molsons announced their intentions." Geoff Molson said of the acquisition, "This is a very exciting time for our family, and we are grateful to the many people and organizations who came forward to offer their collaboration in the development of our proposal." Hickey noted the sale was "greeted with enthusiasm" by NHL Commissioner Gary Bettman and NHLPA Exec Dir Paul Kelly. Bettman: "To the extent that they have been able to find people who are obviously passionate about the game and structure a transaction that makes sense for everybody, that's a real plus for the franchise and the fans of Montreal." Kelly: "The purchase price got up there in numbers that are well above all of our pay grades" (Montreal GAZETTE, 6/21).

LET'S MAKE A DEAL: The GLOBE & MAIL's Sean Gordon cites sources as saying that the deal will be worth at least $550M, "making it the richest transaction in NHL history." The sources added that the final agreement between Gillett and Geoff Molson "took place in the wee hours of Saturday." Gordon reports at least "one other group who had hoped to hijack the deal with a late offer were told on Saturday morning they were too late." Sources indicated that the Molsons will borrow about $200M of the purchase price, while their offer is backed by telecommunications giant BCE and Thomson-Reuters Chair David Thomson. The agreement "represented a denouement to the sale speculation that for months has dogged" the franchise (GLOBE & MAIL, 6/22). The Solidarity Fund of the Quebec Federation of Labour yesterday confirmed its "financial participation in the Molson family's purchase." The Federation previously said that it would "lend a hand to any Quebec-based group looking to purchase" the Canadiens (CP, 6/21). The GLOBE & MAIL's Gordon & Duhatschek cited sources as saying that Gillett was "torn over selling the club before agreeing to a deal." Despite suggestions that he would "keep a token stake in the club," sources indicated that Gillett has "decided to walk away altogether" (GLOBEANDMAIL.com, 6/20).

Writer Says Something Comforting About Molson Name Taking Canadiens Back

BACK IN THE FAMILY: BLOOMBERG NEWS' Matuszewski & Tomesco noted the deal would put the Molson family "back in control of the team it owned" from 1957-71, before brewer Molson Inc. owned the club from '78-'01, when Gillett acquired a majority interest (BLOOMBERG NEWS, 6/20). In Montreal, Dave Stubbs wrote under the header, "Molsons, Habs Have Long History." Since Molson Coors currently owns 19.9% of the Canadiens, when the deal closes, the "legendary name in Canadian business will control" 100% of the franchise. There was an "enormous sigh of relief heard among Canadiens fans when word of the deal emerged," as Quebecor "struck fear into many hearts, the telecommunications giant seemingly growing new tentacles with which to wrap the club." Stubbs wrote there is something "almost comforting about the Molson name taking the Canadiens back" (Montreal GAZETTE, 6/21). Also in Montreal, Red Fisher wrote the Molson name "always has been linked with success during previous involvements with the Habs," and it is a "comfort to have the Molson family back as the captains of the ship" (Montreal GAZETTE, 6/21). The Montreal GAZETTE's Jack Todd writes this deal is the "best possible news for Canadiens fans who feel battered, bruised and bewildered after six months of off-ice embarrassment and on-ice calamity." Gillett during his ownership "came up with some outrageous cash grabs," and the Molsons should "put the brakes on stunts like that and on some of the more aggressive marketing ploys" (Montreal GAZETTE, 6/22). The GAZETTE takes a look at Geoff, Andrew and Justin Molson (Montreal GAZETTE, 6/21).

Writer Says Gillett Has Been "Exemplary Owner"

BYE, GEORGE: The Montreal GAZETTE's Stubbs yesterday noted Gillett "bought extraordinarily low and has sold exquisitely high." Gillett, who acquired the franchise and the arena in '01 for $275M, has been an "exemplary owner." He assembled a "fine management team and never meddled." But Gillett "signs off on the Canadiens, having delivered a public trust back into the hands of men who will care for it deeply" (Montreal GAZETTE, 6/21). The NHLPA's Kelly said, "Mr. Gillett was really a fine owner. We will miss him in the National Hockey League. I thought he brought a lot of creativity and ingenuity and colour to the sport" (Montreal GAZETTE, 6/21). The GLOBE & MAIL's Jeff Blair writes Gillett is "owed a debt of gratitude" for his ownership. He "accorded the Canadiens' history an enormous amount of respect and always seemed to err on the side of tradition" (GLOBE & MAIL, 6/22). The GAZETTE's Stubbs today writes for Gillett, you "always sensed that the Canadiens were also an emotional investment." The team's 100th anniversary season this past year was a "marketing bonanza, sometimes not far inside the bounds of good tastes, but the owner always detoured well out of his way to make the alumni feel they still were a special part of the organization" (Montreal GAZETTE, 6/22). The Montreal GAZETTE's Fisher wrote Gillett "doesn't know much about hockey, but he has a sense of humour, which is a priority in the business of owning an NHL team." He "did the best he could" (Montreal GAZETTE, 6/21).

BOON FOR LIVERPOOL: The GAZETTE's Hickey noted while Gillett bought the team for $275M, his stake in the team and Bell Centre is "highly leveraged and he needs cash to pay down debt taken on" when he and Tom Hicks acquired EPL club Liverpool (Montreal GAZETTE, 6/21). In Manchester, Stuart James writes the sale "will help Gillett provide the increased personal guarantees that Royal Bank of Scotland and Wachovia have been seeking in relation to the refinancing" of Liverpool's loan before the July 24 deadline (Manchester GUARDIAN, 6/22).