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The famed circus troupe – the big top seen here in the Old Port in Montreal on May 13, 2020 – has seen its revenue drop to nearly zero overnight as its live shows were cancelled across the world.

Christinne Muschi/The Globe and Mail

Three months after cashing out of Cirque du Soleil, founder Guy Laliberté says he is weighing whether to jump into the looming fight for the circus troupe he founded.

As deep-pocketed private equity funds and Quebecor Inc. weigh offers for the financially-strapped Cirque, Mr. Laliberté wants to see the business end up in stable hands. “As the Cirque faces the biggest challenge of its existence we’re about to see a wrestling match involving a number of players,” the Montreal-based entrepreneur said in an open statement Wednesday. “From my point of view, we’re in for a battle royale. ... I am deciding whether or not I’m going to jump into that wrestling ring.”

The famed circus troupe has seen its revenue drop to nearly zero overnight as its live shows were cancelled across the world under government orders prohibiting public gatherings. Some 4,700 Cirque employees have been laid off while a core group of employees tries to plot how to get operations going again.

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The cash-strapped entertainment company has now launched a formal search for new capital. Existing shareholders TPG Capital LP, Fosun Capital Group and Caisse de dépôt et placement du Québec recently put an additional US$50-million into Cirque this month to pay bills that include interest on loans, giving the company a bit of breathing room until it finds a more permanent solution.

Cirque hired National Bank of Canada and U.S. investment bank Greenhill & Co. last week to advise its board of directors on either selling the company or negotiating a significant cash injection from its existing owners, according to sources involved in the negotiations. The two investment banks have set a June 8 deadline for initial bids for the Cirque. Mr. Laliberté is seen to be aligned with the existing shareholders, saying in his statement Wednesday that his “heart goes out to them.”

Mr. Laliberté is no longer involved in the Cirque’s day-to-day operations – Mathieu Guerin, site operation director, seen here inside the Big Top on May 13, 2020 – but is still consulted on shows.

Christinne Muschi/The Globe and Mail

But Cirque is attracting outside interest, and must make a deal that satisfies its creditors, who are owed US$900-million. Quebecor announced last week it made a preliminary offer for the business. The telecom and media company said it is willing to put several hundred million dollars into Cirque, but so far there have been no formal talks between the two sides. Private equity fund Providence Equity Partners L.L.C. is also expected to make an offer, according to investment banking sources.

Mr. Laliberté exited his ownership position in the Cirque in February, when he sold his remaining 10-per-cent stake in the company to the Caisse. He is no longer involved in the Cirque’s day-to-day operations, but is still consulted on shows. The founder said potential suitors include existing entertainment-industry players, who see in Cirque a chance to expand their own content and secure priority access to Cirque performances. “Will they make our Quebec icon their priority and give all the love and energy needed to bring it back to life?” he asked.

He also warned of “the sharks, who have no knowledge of the entertainment industry and dream of buying Cirque for a song.” And he evoked the dilettantes: “Those who have no skills or experience in managing cultural organizations of this scale.” Those are the ones who pose the greatest threat to Cirque’s future, he said in the statement.

“It’s clear to me that Cirque’s future will depend on patient investors who will step into the ring and be in for the long haul,” Mr. Laliberté said. “Investors who want to jump into the ring driven only by the urge to set the wheels in motion again too quickly will have to be avoided at all costs.” Cirque du Soleil and Quebecor declined to comment on Mr. Laliberté’s statement.

With files from Andrew Willis

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