New interest in media companies has paved the way for a long-awaited equity issue from an Australian unit of CanWest Global Communications, while the Canadian parent continues to struggle with its financial restructuring.
Ten Network Holdings, a national collection of Australian TV stations, announced plans yesterday to sell $124-million of stock, to pay down debt. The offering will only benefit Ten Network, and will dilute CanWest's stake.
However, the Winnipeg-based parent still controls Ten Network - its stake drops to 50.1 per cent from 56.5 per cent. This deal comes after Ten Network attempted to sell stock in February, only to cancel the financing in the face of bleak market conditions.
Maintaining control means CanWest can expect something of a premium for Ten Network if the division is eventually sold as part of a larger restructuring currently playing out at the parent company.
Macquarie Capital is leading the Ten Network share sale, and new stock is being sold at an 8.4-per-cent discount to where shares closed Monday on the Australian exchange.
Separately, CanWest announced that Canadian newspaper subsidiary CanWest LP did not make a scheduled Aug. 1 interest payment of $18.5-million (U.S.) on $400-million of notes. The move was widely expected, as the company is in restructuring talks with all its creditors.
CanWest is attempting to complete a recapitalization that is expected to include a debt-for-equity swap that will leave creditors owning the company. Details of the oft-delayed restructuring are expected in August.
Seamark's uncertain future
Is there a buyout in the future of besieged fund company Seamark Asset Management ?
The Halifax-based money manager reported disappointing results last week, with two large institutional clients walking and redemptions hitting $640-million. Seamark's assets under management are now $1.96-billion, down 44 per cent, year-over-year. The 20-employee company posted decent performance in its funds, but is plagued by executive turnover.
At best, Seamark's earnings and assets under management are expected to go sideways over the next year. Analyst Michael Mills at Halifax-based Beacon Securities said in a recent report: "This story remains very difficult to forecast, with uncertain market movement and client redemption activity." Then he looked at where Seamark may be headed. "Given its dwindling size, we do not foresee a future for Seamark as a stand-alone public entity," said Mr. Mills, who has a "sell" recommendation on the stock.
The company was spun out of Manulife Financial, which remains the largest shareholder, with a 31-per-cent stake.
"Seamark appears to be trading at a level that partly anticipates an offer for the shares," Mr. Mills said. "Our best estimate for a take-out value is in the $1.50-$1.75 range, but a buyer will require assurances that remaining assets are sticky." The logical buyer is Manulife or existing management. Seamark's market capitalization is $13-million.
Genuity's newest tech whiz
Genuity Capital Markets is the latest independent dealer to embrace electronic trading, hiring a veteran of Scotia Capital this week to enhance its stock trading services.
Employee-owned Genuity picked up John Shingler as its tech whiz, hiring a trader who was at the investment dealer arm of Bank of Nova Scotia. An increasing amount of stock is changing hands through algorithmic trading - driven by computers - and via electronic networks that give institutions direct access to markets.
U.S. dealers pioneered this kind of trading, and it is now catching on with an increasing number of domestic institutions. Scotia Capital has hired a number of electronic trading experts from Perimeter Financial, a pioneer in this field.
GMP Securities, another domestic independent, recently upgraded its electronic trading skills by hiring a pair of experts in the field from UBS Securities. Canaccord Capital has also begun a push into the field. The Genuity hire was first reported in the Bill's Buzz blog run by executive search firm Vlaad and Co.
Citibank loses two
Bank of America Merrill Lynch is building up its corporate lending operations in Canada with the addition of two former Citibank staffers.
The hires clarify some of the strategy questions that had surrounded the firm, formed by B of A's contentious purchase of Merrill. Only three months ago, Bank of America was letting go many of its Canadian corporate bankers.
With the hiring of Chris Impey to run corporate banking, B of A Merrill is signalling that it's back in the game. Mr. Impey comes from Citigroup, where he was the managing director responsible for Canadian corporate clients, in addition to running the Calgary office. In that role, he arranged merger financing for some big clients like TransCanada Pipelines.
© 2007 The Globe and Mail. All rights reserved.
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