CanWest Won't Be Same Downunder

Saturday December 9, 2006
By John Drinnan

The only thing that seems certain about the future of CanWest Global Communications operations in New Zealand and Australia is that they will not stay the same.

TV3 and the other broadcasting assets in CanWest MediaWorks New Zealand look set to be caught up in its parent company reviewing its South Pacific investments.

The Canadians say they are unlikely to retain the status quo.

CanWest Global Communication owns 70 per cent of publicly listed CanWest MediaWorks New Zealand and a 56.4 per cent economic interest in the Ten Network in Australia.

But with media ownership rules likely to change across the Tasman there is widespread speculation it plans to sell assets that include half New Zealand’s commercial radio stations.

Speaking after the CanWest MediaWorks New Zealand annual meeting yesterday the chairman of CanWest New Zealand – Winnipeg-based Global executive Tom Strike – said he expected something would happen. “The status quo is an option but it’s not a likely outcome.”

There has been speculation CanWest was a likely seller and that has pushed up the share price over the past month, which closed at $2.05 yesterday.

“There are any number of opportunities. Buying something is an option, or merging with another media group,” said Strike. Either way he said there was no need for the parent company to “rush to the altar”.

Strike was on a whistlestop visit to New Zealand with other CanWest Global executives and CanWest New Zealand board members John Maguire and Leonard Asper.

Asper is the company president and head of the Asper family that has a controlling interest in the Canadian media company.

Strike confirmed that the company had met with Citibank in Sydney to discuss the review but declined to comment about speculation that the company had held discussions with private equity partners.

Private equity companies have been key players in privatisation and sales of assets in Australia. CanWest had had “very preliminary discussions with a variety of people. I don’t see the process as requiring any urgency or need to rush to the altar. We spend a lot of time looking at options and how to reconfigure things so that they make sense”.

Meanwhile, CanWest MediaWorks New Zealand chief executive Brent Impey reported improvement for results in the first quarter to November 30 and gave an optimistic forecast of the second quarter.

First-quarter revenue was up 2 per cent or $1.7 million across the group to $74.5 million. Operating earnings increased 3 per cent to $24.3 million.


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