SPIRIT OF MANITOBA MAKES OFFER TO BUY JETS
A group of Winnipeg businessmen calling themselves Spirit of
Manitoba Inc. made a formal offer to buy the Jets Friday. The
offer reportedly "hinges" on a few points: The signature of the
current owners, the approval of the NHL, about $20M more in
private-sector contributions, and a Revenue Canada ruling that
would make some contributions tax deductible. Jets Owner Barry
Shenkarow is reportedly "disappointed the offer did not appear to
correspond to the terms of negotiation agreed to earlier." Terms
of the deal include the Spirit group paying Shenkarow and his
partners more than $32M in cash and granting them another $22M in
equity in the new ownership group. The current owners would
receive two seats on a new 10-member board, and the board would
decide whether Shenkarow "gets his wish to stay on as president."
Spirit, formerly know as Manitoba Entertainment Complex, is led
by Izzy Asper of CanWest Global Communications (CP/Toronto GLOBE
& MAIL, 6/10). In Winnipeg, Nick Martin reports the city will
"refuse to pay" any further Jets' losses if Shenkarow turns down
the latest offer. A "closed-door council session" has been
called by Winnipeg Mayor Susan Thompson for today to hear from
the Spirit group, Winnipeg Enterprises, the city's auditors and
senior administrators (WINNIPEG FREE PRESS, 6/10). But Scott
Taylor writes that the Spirit deal is "not an offer to purchase.
It is only an option to purchase as long as certain criteria are
met and that criteria is completely out of the hands of the
vendor ... As it stands, this is a horrible deal for the seller"
(WINNIPEG FREE PRESS, 6/11).