BCE, Rogers acquire 75% of Maple Leafs owner MLSE for $1.32 bln
Telecoms giants BCE (TSE:BCE) and Rogers Communications (TSE:RCI.B) Friday agreed to buy a controlling 75 percent stake in Maple Leaf Sports & Entertainment Ltd., owner of the Toronto Maple Leafs NHL franchise, in a $1.32 billion deal.
Ontario Teachers’ Pension Plan, Canada's third-biggest pension fund with $107.5 billion in net assets, is selling the 75 percent stake in the company which also owns NBA basketball team the Toronto Raptors and MLS soccer team Toronto FC.
Minority investor and current chairman of Maple Leaf Sports, Larry Tannenbaum, will increase his stake in the sports company to 25 percent from 20.5 percent through Kilmer Sports, a company that Tannenbaum controls.
The deal values the entire sports company at just over $2-billion, including debt.
Bell Canada and BCE president and CEO, George Cope, said: "MLSE teams are among the most popular major-league franchises in North America, iconic sports brands watched and loved by millions of fans across our nation.
"As Canada's largest and most established communications company, Bell is proud to be part of this all-Canadian acquisition of a world leader in sports and entertainment."
Rogers Communications president and chief executive officer, Nadir Mohamed, added: "We're excited to partner with MLSE to create highly interactive and engaging experiences for hockey, basketball and soccer fans, creating the perfect marriage of content and distribution.
"This investment fits squarely into our strategy of securing premium content and making it accessible to Canadians when, where and how they want it."
The Maple Leafs are the NHL’s most valuable franchise at about $521 million, according to Forbes, up from $505 million a year ago. The Raptors are worth $399 million, placing them 10th out of 30 NBA franchises, Forbes said earlier this year.
The transaction is expected to close in mid 2012, and is subject to regulatory and league approvals. A sale of the Maple Leafs and Raptors must be approved by the NHL and NBA. BCE may also have to sell its 18 percent stake in the Montreal Canadiens hockey team. Rogers also owns Toronto's Blue Jays baseball team.
Friday's deal fits in with BCE's strategy of adding content that can be sold to subscribers on smartphones, tablets and computers.
In a statement Teachers Private Capital, the investment arm of Ontario Teachers’ Pension Plan, said: "MLSE is one of Teachers’ longest standing and most successful investments. We are proud of this iconic company, in which we first invested in 1994.
"It is second to none in the industry and has a very bright future. We believe that Bell and Rogers, with their MLSE partner Kilmer Sports, will deliver on the company’s potential."
In March, Canada’s third-biggest pension fund said it may sell its majority stake in the sports franchise owner after receiving unsolicited expressions of interest. The fund, based in Toronto, then said last month it would keep its stake in Maple Leaf Sports but changed its mind after it was approached by Bell and Rogers with an unsolicited offer that met all of its original terms and conditions, the pension fund said in a statement issued Friday.
Earlier this year, the hockey team Atlanta Thrashers was sold to Winnipeg-based True North Sports & Entertainment, and moved to Winnipeg to become the Winnipeg Jets. The sale price was $170 million, including a $60 million re-location fee that was split by the rest of the league, according to ESPN.