A report that Rhode Island-based Providence Equity Partners LLC had looked into purchasing the 80% stake of Maple Leafs Sports & Entertainment "held by Ontario Teachers' Pension Plan has been shot down by other sources," according to Jeff Blair of the GLOBE & MAIL. Nothing will be done with the sale "until MLSE chairman/part-owner Larry Tanenbaum exercises his right of first refusal." However, considering what MLSE is and "how much money it’s worth, it would be far-fetched to imagine United States- or China-based financial concerns hadn’t looked into the Teachers stake" (GLOBE & MAIL, 11/17). In Toronto, Rick Westhead yesterday cited a source as saying that Providence Equity has "inquired about Teachers’ stake in Maple Leaf Sports," though it is "unclear whether it has made a formal offer." It is possible neither Rogers Communications, which has been rumored to be a bidder, nor Providence Equity "ends up with the company." Tanenbaum "has the right to match any offer" for Teachers' 80% interest, but it is "unclear whether Tanenbaum would match any offer for Teachers’ stake." A source said that he would "consider matching any offer to buy out Teachers’ and then file an initial public offering for Maple Leaf Sports." While such an offering "would probably be wildly popular with investors, the NHL and the NBA would both probably oppose such a move because it would make public more of their internal financial information." But it is "unlikely that the leagues could do anything to stop a public stock listing" (TORONTO STAR, 11/17).
ASKING AN EGO PREMIUM: The GLOBE & MAIL's David Shoalts cites a source as saying that there is "little chance a U.S. equity fund or any financial institution is going to wind up with control" of MLSE. The source, an investment banker, said that as long as Teachers "wants a premium price for its shares, no equity fund, financial institution and even other corporations, foreign or domestic, is willing to pay it." The banker called this an "ego premium." When Teachers "put its shares on the market last March, its officials said they would only sell if someone met their price." Sources "estimate that price to be as high as $1.8-billion" (GLOBE & MAIL, 11/17). Meanwhile, in Toronto, Cathal Kelly writes, "The Leafs must never be sold to Americans." Kelly: "We have accepted that whoever owns the Leafs will, despite best intentions, destroy them. They must at least be here while they're doing it" (TORONTO STAR, 11/17).
