MONTREAL — The head of Quebecor Inc. (TSX: QBR.A) indicated Sunday he would be keeping a keen eye on the legal proceedings involving Canwest Global Communications’ (TSXV: CGS) newspaper division.
“We’ll be watching the proceedings,” Pierre Karl Peladeau told The Canadian Press at the centenary celebrations for independent Montreal newspaper Le Devoir.
On Friday, the Winnipeg-based publisher filed for protection from creditors and instigated the sale process for its newspaper division, which includes 10 metropolitan dailies.
Peladeau said the development didn’t come as a surprise but may be of interest to his company, noting the Big Five Canadian banks agreed to make what’s considered a “stalking-horse” bid setting the base price for an auction that could fetch more than $1 billion.
“We’ll see if there are people, institutions, who are interested and we’ll determine eventually where we go from there,” Peladeau said.
He noted the news of Canwest’s bankruptcy protection filing was still too fresh for decisions to be made but wouldn’t shut the door on the possibility of snapping up a new daily.
“We already have newspapers in a number of their cities – Edmonton, Calgary, Ottawa – so it’s undeniable there are issues concerning competition,” Peladeau said.
“But today, the notion of competition in the print press, with fragmentation and the multitude of news media, it may not be such a serious concern as in prior years. All of this will be part of a more detailed analysis. For sure, as circumstances play out, we’ll have a clearer idea of what will occur.”
Quebecor is one of Canada’s largest media companies. Its newspaper holdings include Sun Media Corporation, Canada’s largest chain of tabloids and community newspapers, which includes Le Journal de Montreal, the Ottawa Sun and the Toronto Sun. The corporation also owns a number of free daily papers and alternative and community publications and new media holdings such as canoe.ca. It also owns the TVA group, the largest French language TV network in North America.
The base price of at least $925 million is the amount of money that Canwest’s lenders are owed by the company’s newspaper and publishing division.
The banks hope they’ll get that money back, and more, through an auction process that is to start as early as this week.
Canwest was forced to seek protection from creditors last fall when the recession squeezed advertising revenues at its newspapers and TV stations.
As well, $4 billion in debts piled up from earlier acquisitions produced mounting losses and made it impossible for Canwest to stay out of the red.