MONTREAL --- Paragon Entertainment Corp. is considering splitting its assets and selling them separately, a move that might involve selling London-based Handmade Films as a stand-alone unit.
Alliance Communications has confirmed for the first time that it is actively looking at acquiring all or part of Paragon, and execs at Toronto-based Alliance are currently crunching the Paragon numbers to see if the deal is viable.
Paragon CEO Jon Slan told Daily Variety that his company is in negotiations with several interested partners and that some of the scenarios under discussion include selling different divisions of Paragon.
TV, film units may split
One possibility is to put two units on the market, one including Paragon's family-fare TV products and the other built around Handmade. Since acquiring Handmade, Paragon has re-activated the British international sales and production company, and the Handmade pics have added significantly to recent Paragon earnings, according to Slan.
Handmade also has a valuable library, thanks to vintage titles like "Withnail and I," "Time Bandits" and "Mona Lisa."
Alliance is taking a close look at Paragon's books before going ahead with a bid for the company, said Alliance chief financial officer Roman Doroniuk.
"We're continuing to look at it seriously," Doroniuk said. "We haven't come to any conclusion. There's definitely some value in Handmade and (Paragon) has a decent library."
In December, Paragon announced that it had engaged Yorkton Securities to explore "strategic opportunities for maximizing shareholder value," including potential mergers or acquisitions. It is too early to say what form any impending deal will take, Slan said.
Plenty of possibilities
"We have a lot of interested parties and a couple of companies are interested in the whole company," Slan said. "We could split up the company. It's in the formative stage. Paragon still very much believes in Handmade. But the question is how you maximize value for the shareholders."
Paragon is a publicly traded company, and the board of directors controls more than 50% of the 17 million shares. Slan is the largest single shareholder, with approximately 17% of the equity. The shares are trading this week on the Toronto stock ex-change at just over C$1 (70¢).
Handmade vice president Gareth Jones said that the feature film outfit is "more active than ever" and that the company's business has not been effected by the changes looming on the horizon for Paragon.
Handmade will be selling three new features at the upcoming American Film Market.
The titles are "Lock, Stock and Two Smoking Barrels," toplining Sting, Laura Bailey and Jason Flemyng, and executive produced by Steve Tisch; "The Secret Laughter of Women," a romantic comedy set in France starring Colin Firth and Nia Long; and "The Man With Rain in His Shoes," a comedy co-produced by Handmade and Spanish producers Esicma.
Paragon TV projects include "Zoboomafoo," a 40-episode series for pre-schoolers set to launch on PBS this fall, and "Grand Illusions: The Story of Magic," a 50-episode docu series made for the Canadian Discovery Channel.
Slan suggested he could remain associated with Handmade, even if he sold off Paragon's TV assets.
"I'm committed to feature film," he said. "That's been an abiding interest."
One of the Paragon suitors was widely rumored to be Lions Gate Entertainment, the new Vancouver-based entertainment conglomerate with deep pockets, but a spokesman for the company said Lions Gate is not presently in negotiations with Paragon.
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