CanWest MediaWorks' independent directors have backed private equity outfit Ironbridge Capital's $2.33-a- share takeover offer, despite the bid falling towards the skinnier end of an independent valuation range.
Meanwhile, CanWest's largest minority shareholder, Brook Asset Management, which may have the ability to block the offer, is refusing to
say whether it will accept.
Ironbridge's subsidiary HT Media has already secured 70 per cent of the company - which owns and operates television channels TV3 and C4 as well as a substantial portfolio of radio assets - from its existing majority owners, Canada's CanWest Global Communications.
Under takeover rules, it must extend the offer to other shareholders on equivalent terms.
That offer was sent to shareholders yesterday with a target company statement containing the independent directors' recommendation and a report from valuers Grant Samuel.
The report found Ironbridge's offer was within Grant Samuel's $2.26 to $2.59 valuation range. The valuation range and Ironbridge's offer exclude a 10c per share fully imputed special dividend paid yesterday.
CanWest's directors also said option holders should accept Ironbridge's offer for their securities, which ranged from 64c to 90c.
Should Ironbridge secure 90 per cent or more of the company, it will be able to compulsorily acquire remaining shares and take it private.
Standing in its way is Brook Asset Management which, since the offer was announced, has increased its holding from 5 per cent to 8.65 per cent - close to a blocking stake.
Brook had said it was waiting on Grant Samuel's report before deciding whether to accept.
Yesterday Brook executive chairman Simon Botherway said his firm had noted the report and made a decision but that would not be revealed until either the end of the offer period or the issue of a notice that Ironbridge had reached 90 per cent.
Another fund manager, who did not wish to be named, believed Brook's "aggressive" purchase of CanWest shares after the offer announcement indicated it was looking for a better price. "I've yet to come across any investor that acquires a blocking stake under a takeover rule simply just to fold into the bid. That doesn't pass the sniff test."
Ironbridge has said it is not necessarily seeking 100 per cent of CanWest, but private equity firms invariably prefer to operate their businesses away from the scrutiny faced by listed companies. CanWest shares closed unchanged at $2.30.
Equity moves in
* CanWest's independent directors have recommended Ironbridge's $2.33-a-share takeover offer.
* Independent valuer Grant Samuel says CanWest is worth between $2.26 and $2.59.
