OSC shoots down bid to delay Corus vote
By Christine Dobby
Ontario's securities regulator has denied a last-minute bid by Catalyst Capital Group Inc. to delay a shareholder vote on Corus Entertainment Inc.'s proposed $2.65-billion acquisition of Shaw Media.
A three-member panel of the Ontario Securities Commission heard arguments Monday on whether Catalyst had the proper standing to force a full hearing on issues related to Corus's disclosures surrounding the deal.
In Catalyst vs. Corus, delay tactics deserved to be shot down
By Tim Kiladze
The first sign that Newton Glassman was up to something emerged a month ago.
On Feb. 9, a public-relations adviser for Catalyst Capital, Mr. Glassman's private equity firm, e-mailed me, offering to arrange an interview. Mr. Glassman was willing to stick his neck out for Corus Entertainment Inc.'s minority shareholders, the adviser said, and he wanted to explain why.
Mr. Glassman spent the first few minutes of our eventual phone conversation boasting about his firm. Then he and his partner, Gabriel de Alba, laid out a litany of concerns they had with Corus's acquisition of Shaw Media. Admittedly, the allegations sounded pretty serious, but it didn't seem prudent to publish anything until seeing the slide deck Catalyst kept referring to, in order to crosscheck their claims with Corus's proxy circular.
What's unfolded since is one of the most desperate and clumsiest activist campaigns I have ever seen.
Activism isn't anything new for Canada. Bold allegations are routinely launched like missiles, as they were in Jana Partners' laughable 2013 campaign to split up Agrium Inc. Hyperbolic hostile takeover bids are also par for the course – the latest being Suncor Energy Inc.'s pursuit of Canadian Oil Sands Ltd.
What Catalyst is up to is more perplexing. Its campaign has been half-baked and sometimes categorically wrong. Mr. Glassman and his partners have criticized Corus for allegedly misleading shareholders by being selective about the metrics used to value Shaw Media – but Catalyst itself is choosey. The firm alleges the Corus deal has no merit because the fairness opinion came from RBC Dominion Securities, Corus's own adviser – yet Barclays Capital was also hired to put together an independent valuation.
Catalyst hasn't been entirely up front about its intentions, either. When the firm first went public with its allegations, Mr. Glassman and Mr. de Alba said they were making a stink for corporate governance reasons. The Shaw family, they claimed, was making too much money off the deal and minority shareholders weren't realizing it.
It was only after they started getting blowback that Catalyst finally acknowledged there was more to their efforts: This was an activist campaign, and they were also out to make money for themselves. Their thinking, they later revealed in a presentation: If Corus lowers its purchase price for Shaw Media, minority shareholders – including Catalyst – could be entitled to a special dividend.
But where Catalyst really crossed the line was applying to the Ontario Securities Commission for a last-minute hearing to delay the shareholder vote, which is scheduled for Wednesday. Catalyst claimed that Corus needed to refile its shareholder documents because the existing versions were misleading to investors – a process that would delay the vote.
Underwriters unloading unsold Fairfax shares at a discount
By Niall McGee
A sizeable syndicate of underwriters is unloading hundreds of thousands of unsold Fairfax Financial Holdings Ltd. shares at bargain-basement prices.
After equity markets closed on Monday, bankers cut the offer price on the portion of a recent $735-million financing deal that did not entirely sell out to $687.50 a share. That is about 6.5 per cent below the original price of $735 a share, which was unveiled on Feb. 24.
The revised price means bankers will lose money on the portion of the shares that did not sell the first time around.
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