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The Caisse de dépôt et placement du Québec is vying for a minority stake in the Cirque du Soleil as political opposition mounts over the prospect of a foreign takeover of the famed Montreal circus company.

Christinne Muschi/REUTERS

The Caisse de dépôt et placement du Québec is vying for a minority stake in the Cirque du Soleil as political opposition mounts over the prospect of a foreign takeover of the famed Montreal circus company.

According to people familiar with negotiations, the Caisse has made overtures to potential suitors that it would like to join the winning bid for the Cirque du Soleil by acquiring a minority stake of about 10 per cent. These sources said the Caisse, Canada's second-largest pension fund managers by assets, is reluctant to buy a bigger stake because the production company is in need of significant capital to revitalize some of its struggling shows and expand into new foreign markets. A Caisse spokesman declined to comment.

The circus's controlling shareholder, Guy Laliberté, is looking for a strategic partner in a company he founded 30 years ago. Initially, he was seeking to sell a minority interest in the company but he's now said to be open to monetizing the bulk of his 90-per-cent stake. Suitors have been given until next week to make offers.

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Although the Cirque du Soleil attracted several interested Canadian and foreign bidders when Mr. Laliberté's adviser Goldman Sachs first began soliciting buyers late last year, sources said only a small handful of investors are still at the table. It is understood some prospective buyers grew concerned about the company's deteriorating financial condition after gaining access to internal financial documents.

Despite the company's weakened condition, the prospect of a foreign suitor buying the Montreal-based group is igniting a political backlash by opposition parties that charge Quebec's Liberal government should do more to ensure the Cirque doesn't fall into non-Quebec hands.

The Liberals, meanwhile, are trying to balance their concern over losing a local head office and potential jobs with their reluctance to intervene in what remains a private transaction.

But in a sign of just how politically sensitive the potential sale has become, Premier Philippe Couillard made a rare personal plea on Thursday, urging Mr. Laliberté to keep the circus troupe's decision-making and creative base in Montreal.

The founder is said to be pushing for a commitment along those lines from buyers, although it's unclear if it's a condition of the sale.

"I'm making this appeal as Premier in the name of Quebeckers," Mr. Couillard said in a short statement before a caucus meeting Thursday.

"To ask him to consider the important ties between Quebeckers and the Cirque du Soleil."

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Mr. Laliberté is one of Quebec's most influential entrepreneurs and the company he's built represents a big source of pride for Quebec, the Premier added.

"For Quebeckers, for the government and for all political parties represented here, it is very important not only that the Cirque headquarters remain in Montreal but that key activities, including creative activities, should also remain in Montreal."

The Cirque employs about 4,000 people, of which roughly 1,500 work at its international base in Montreal's Saint Michel district.

Those employees are involved in the conception of shows as well as making costumes and training performers.

Although the Premier's plea was meant to tug at Mr. Laliberté's patriotism, Mr. Couillard also recalled the public backing the Cirque received when the company was struggling to break out from its modest beginnings as a small performance troupe in Charlevoix in the 1980s.

"Let's remember the history of the start of the Cirque du Soleil. It was very much governments, the government of Quebec, that supported it. So taxpayers," the Premier said, while acknowledging that the entertainment company is nevertheless a private entity controlled by Mr. Laliberté and the final decision is his. A spokeswoman for the Cirque declined to comment on the Premier's plea.

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Among the public money the Cirque has received was a $1.5-million subsidy from the Parti Québécois government of René Lévesque. The company says on its website that it has not received any grants from the public or private sectors since 1992.

Potential buyers still in the game at this point include at least one Quebec-based suitor, Quebec Economy Minister Jacques Daoust suggested in the legislature when pressed on the matter during question period.

"There are serious Quebec groups that are involved in this transaction and have been for quite some time," Mr. Daoust said.

"There are serious Quebeckers at the heart of this transaction."

Investment bank Goldman Sachs is running the auction. Initial valuations pegged the Cirque at more than $2-billion.

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