SBD/May 11, 2011/Franchises

Ontario Teachers' Pension Plan To Increase Stake In MLSE To Facilitate Sale

The Ontario Teachers’ Pension Plan is "moving aggressively to tidy up the ownership" of Maple Leaf Sports & Entertainment, a "bid to smooth the way for a sale," according to Perkins, Robertson, Grange & Parkinson of the GLOBE & MAIL. OTPP, which already holds two-thirds of MLSE, “struck a deal to buy” Toronto-Dominion Bank's 13.46% stake in the company. The deal will “simplify an auction process that has been under way since March.” But it does not change the fact that Chair Larry Tanenbaum, who "owns the second-biggest interest in MLSE," is “still the kingmaker in this process.” Sources said that he is “in no rush to make a decision.” Tanenbaum yesterday “met with a private equity official” from OTPP in Toronto. He now “has the right to buy one-fifth of TD’s stake.” With TD’s 13.46% interest, OTPP would hold 79.53% of MLSE. If Tanenbaum “buys in,” OTPP would hold 76.35%. Morgan Stanley, which is advising on the sale of MLSE, has “not yet opened up the books to potential buyers” (GLOBE & MAIL, 5/11). In Toronto, Tony Van Alphen notes OTPP’s bid for TD’s shares would “make the sale of its own majority stake in the franchise more attractive to a suitor.” Tanenbaum and his firm Kilmer Capital “holds the other 20 per cent of MLSE.” Sources said that OTPP is “seeking about $1.3 billion for its current 66-per- cent in MLSE," which includes the Maple Leafs, Raptors, MLS Toronto FC, AHL Marlies, Air Canada Centre, Maple Leaf Square condominium development and "two specialty television channels." Sources said that TD “has sought a buyer for several years.” One insider said, “It made money on its original investment and has wanted to get out for some time” (TORONTO STAR, 5/11).
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