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Halifax's DHX Media has announced the purchase of Family Channel, Canada's most-watched children's TV channel, and three other properties from Bell Media, for approximately $170-million.

Halifax's DHX Media has changed its mind, cancelling a share offering only three days after the deal was launched.

On Tuesday, DHX, which produces and distributes television content, announced plans to sell 8.7 million shares through a marketed offering. At its current market price, the deal would have raised $76-million and the proceeds would have been put toward debt repayments.

But late Thursday the company changed course, opting to pull the offering after concluding "current market conditions are not conducive for an offering on terms that would be in the best interests of DHX's shareholders."

Global markets have been shaky this week, on the back of news in China and Greece. However, such turmoil already existed when DHX decided to launch the offering.

The decision to pull the deal echoes a similar scenario for CHC Student Housing Corp., which decided to cancel its own $93-million share sale earlier this week. But there is a difference: CHC tried to sell the deal for nearly two months, and its troubles partly stemmed from pricing terms that didn't sit well with some investors.

When DHX announced its offering, CIBC World Markets analyst Tony Rizzi wrote in a note to clients that the deal "looks to be an opportunistic one," suggesting the company was hoping to raise money for cheap after its stock went on a wild run. Two years ago, DHX shares traded for just $3.18 apiece, and the rapid rise has turned DHX into a major player worth more than $1-billion.

Had the deal gone through, Mr. Rizzi calculated the company's net debt to estimated 2015 earnings before interest, taxes depreciation and amortization have fallen to 1.8 or 1.9 times from 2.8 times. Last fall DHX sold $175-million worth of seven-year bonds.

DHX is looking to grow by striking acquisitions and recent deals, which have made shareholders happy, including paying $170-million to buy Family Channel and three other kids TV services that BCE Inc. had to sell to complete its takeover of Astral Media.

The company could not be reached for comment.

In positive Canadian capital markets news, Sleep Country Canada Holdings Inc. priced its initial public offering Friday. The deal size was increased to $300-million from $200-million.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 9:34am EDT.

SymbolName% changeLast
BCE-N
BCE Inc
+0.18%34.32
BCE-T
BCE Inc
+0.09%46.54
CM-N
Canadian Imperial Bank of Commerce
+0.04%50.09
CM-T
Canadian Imperial Bank of Commerce
+0.37%68.15
ZZZ-T
Sleep Country Canada Holdings Inc
+0.6%30.17

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