News

Potential bidders have been poring over the Montreal Canadiens' books for several weeks as part of due diligence procedures that could eventually lead to a deal to sell all or part of the team, sources say.

A source with knowledge of the behind-the-scenes machinations involving the Canadiens told The Globe and Mail that the process has been continuing since early March. There have been continued denials from the ownership that a decision has been made to sell the franchise, but it has emerged that would-be buyers are being asked to submit formal offers this week.

According to Radio-Canada, which cited unnamed corporate sources, several groups have signed confidentiality agreements with the Bank of Montreal's investment banking arm.

The network reported that 10 groups, including billionaire businessmen Stephen Bronfman of Claridge Investments Inc.; Joey Saputo, son of cheese magnate Lino Saputo; and Guy Laliberté, founder of Cirque du Soleil, have signed the pacts.

A source told The Globe it was "very disturbing" the names were made public and didn't deny the veracity of the list.

Formal bids are to be tabled by 5 p.m. tomorrow and as many as 50 potential purchasers have been identified by the bank advisers, the network reported.

The list reportedly includes: Caisse de dépôt et placement du Québec; Productions Feeling, owned by songstress Celine Dion and promoter-husband René Angélil; Claridge Investments Inc., the company controlled by Mr. Bronfman; publishing and television giant Quebecor; arena management and hockey equipment concern Roustan Capital; and Spectrum Equity, a U.S.-based private equity fund; the ALDO Group, a shoe and leather consortium founded by Montrealer Aldo Bensadoun.

Majority owner George Gillett, who owns 80.1 per cent of the team, recently retained BMO Nesbitt Burns Inc. to evaluate his Canadian holdings — which include the team, the Bell Centre arena, and a concert production firm — with a view to "profit maximization" strategies that could eventually involve a sale of one or more assets.

Though Mr. Gillett owns the Bell Centre outright, 19.9 per cent of the Canadiens is held by the Molson Coors brewery, the previous owner. The company has said it's not interested in divesting itself of its stake, and Radio-Canada reported that the Molson family is one of the bidders.

The news that Mr. Gillett had brought in the investment bankers was first reported by the Montreal newspaper La Presse on March 23; he subsequently told the Associated Press the move was about "estate planning, it has nothing to do with any decisions to sell any assets."

Mr. Gillett couldn't be reached for comment late last night, but Canadiens vice-president Donald Beauchamp said the story is substantively similar to the La Presse revelations.

Ronald Monet, a spokesman for BMO, said "we cannot comment on any rumours relating to the Canadiens, but can only reiterate that BMO… has the mandate to evaluate the Canadian assets of the Gillett family so as to maximize their value."

Since the banking and financial crisis worsened last year, Mr. Gillett, an old hand at heavily leveraged business acquisitions (he also filed for bankruptcy in the early 1990s before rebuilding his business), has been beset by talk he is in financial distress.

But sources close to the Denver-based ski resort tycoon, who made his fortune in meatpacking and television stations, say the reports are exaggerated.

Nevertheless, the Canadiens — which Fortune magazine estimates are worth $335-million (U.S.), third-highest in the NHL — are an eminently sellable asset. Given Mr. Gillett, who was initially viewed with suspicion by the Habs nation, paid a modest $180-million for the team and the arena, he stands to make a substantial profit.

It could come in handy.

Mr. Gillett and Texas businessman Tom Hicks jointly own British soccer giants Liverpool FC, and are trying to refinance nearly $470-million in debt they used to purchase the team before a July deadline.

Mr. Hicks has also indicated he is looking at selling minority stakes in his sporting properties, which include the NHL's Dallas Stars and Major League Baseball's Texas Rangers.

Though former Habs great Serge Savard said earlier this week he would be interested in buying the team if it were for sale, Radio-Canada said his name doesn't figure on the list.