Leonard AsperSean Kilpatrick
Leonard Asper has resigned as chief executive officer of CanWest Global Communications Corp. , citing a conflict of interest.
His resignation Thursday, after a decade at the helm of the company his father Izzy Asper founded, comes as Mr. Asper works on a potential bid to stay on as a key investor in CanWest.
However, since the company and its board have supported a recent deal to bring in cable giant Shaw Communications Inc. as a 20 per cent investor, Mr. Asper's rival bid is now in conflict, a source close to the company said.
Shaw put up $95-million two weeks ago for a stake in CanWest Media Inc., which includes the company's major broadcast operations such as Global Television. As the company undergoes a financial restructuring, it has been looking for a new Canadian investor.
Mr. Asper, working with New York investment bank Goldman Sachs Group Inc. and private equity firm Catalyst Capital Group, launched a rival bid at the last minute, but was turned down by on Ontario judge.
Mr. Asper needed to resign as CEO since he continues to work on that rival bid to invest in the company.
There are several ways Mr. Asper and Goldman Sachs could inject themselves back into the CanWest situation.
Goldman Sachs owns a significant portion of CanWest's broadcast operations, which it obtained through its financing of CanWest's takeover of Alliance Atlantis Communications Inc. in 2007.
Since CanWest and its creditors will have to work out an agreement with Goldman Sachs at some point, the investment bank could use those negotiations to take a stake in CanWest. It is possible that group could insist that Mr. Asper become the new Canadian investor, rather than Shaw.
The value of Goldman's stake has not been determined, but if it is determined to be worth more than one third of the broadcast operations, Goldman would have enough votes to push out Shaw if it wanted, using Mr. Asper as the Canadian investor in the deal.
The break fee for the Shaw deal is $5-million, a sum considered small enough that either side could walk away.
Under the terms of the sale of CanWest, Shaw has not been able to talk to Goldman. However, Shaw has said the time will come to negotiate with Goldman, and the company could work with the Wall Street giant.
The Catalyst bid with Asper offered up $120-million for 32 per cent of the equity in a restructured CanWest.
Mr. Asper took the reins of the company as CEO in June 1999 at the age of 35.
The man Mr. Asper replaced at the time - Peter Viner, who had stepped in as CEO two years earlier, after Izzy Asper retired from running the company and took the title of executive vice chairman - now steps back into the role at CanWest's broadcast division. Mr. Viner, a veteran CanWest executive, came out of retirement last November to become interim president overseeing the TV operations.
In a memo to CanWest employees Thursday, Mr. Asper said he needed to step down to pursue other opportunities, though he did not reference the rival bid directly.
"As the Company continues to work through the separate, court-supervised financial restructurings of its Publishing and Broadcasting groups, it is a natural time for me to move on," Mr. Asper told staff.
"This decision did not come without a lot of careful consideration. Taking this action now will also allow me to pursue other business opportunities and avoid any conflict of interest that I may have."
"I have every confidence in the strong leadership teams running the publishing and broadcasting businesses and their ability to guide these businesses through the restructuring period."
Grant Robertson