Content ends talks with Peace Arch
Company will not be sold
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Content, a film and TV sales company listed on London’s Alternative Investment Market, announced Thursday that it has withdrawn from sale talks with Toronto-based Peace Arch.
The companies entered into a letter of intent last December, in which Peace Arch indicated it was considering a $69 million bid for Content.
Since then, however, several factors have derailed the deal, according to a statement by Content. These include a decline in the Peace Arch stock price making the proposed share swap less attractive to Content’s owners; difficult conditions in the capital markets; and delays by Peace Arch in completing its audit.
At the same time, Content said it experienced continued positive growth in its business, particularly in its TV division Fireworks Intl., which has acquired the library of Canadian pubcaster CBC.
Content has therefore decided to break off negotiations with Peace Arch, and has also stated that it is no longer seeking a sale to any other party.
The Peace Arch talks were originally prompted by the fact that Content’s largest shareholder Syntek Capital indicated last March that it wanted to sell its stake in the company. But Syntek has now given its support to Content’s decision to continue as an independent company, and does not plan to sell its stake at this time.
“Over the past several months the turmoil in the capital markets and the unexpected delay in the PAE audit have made it difficult to conclude a transaction that achieved appropriate value for our shareholders,” commented Content chairman Alton Irby. “The company is very well positioned to grow organically and to take advantage of an unsettled market to make strategic acquisitions.”
Content CEO John Schmidt added, “We have had a challenging year, but we are extremely excited about the prospects for the company.”
He said that its TV business is thriving, while film sales is also growing well. The U.S. DVD arm Allumination is struggling, however, and Schmidt said the company is “actively pursuing alternatives that will strengthen this division.”
Allumination was sold to Content by its founders, former CBS and Tristar topper Jeff Sagansky and former Paramount exec Kerry McCluggage, who became significant shareholders in Content as a result of that deal.
Sagansky and McCluggage are also key investors in Peace Arch, with Sagansky serving as the company’s CEO, so the combination with Content would have consolidated their holdings into a single large indie entertainment group.
