TORONTO -- Rogers Communications Inc., a major Canadian broadcasting concern, said Thursday it was the mystery suitor behind a $321 million bid for Selkirk Communications Ltd., also a large broadcasting company.
The announcement, described by analysts as a major development in the Canadian broadcasting industry, ended speculation that began late Wednesday when Selkirk disclosed an unidentified suitor proposed acquiring all its shares.
'We think that the key benefit would be in strengthening the Canadian programming efforts of the combined group,' Rogers Chief Executive Officer Ted Rogers said in a statement. 'Canada needs strong broadcasting units to produce Canadian programming that is attractive to viewers.'
Selkirk's class A stock jumped the equivalent of $4.62 a share to close at about $25.80 on the Toronto Stock Exchange. Wednesday, the shares rose $1.54 before trading was halted.
Rogers, which owns a group of broadcasting, cable television and cellular phone companies, including four cable systems in the United States, confirmed it offered to buy all class A non-voting shares of Selkirk for the equivalent of $26.95, or $35 in Canadian currency.
Involving 11.9 million shares on a fully diluted basis, the deal would be worth about $321 million, or $416.5 million Canadian.
The offer was conditioned on support of Selkirk directors, approval of Canadian broadcast regulators and tender of 2,000 closely held class B voting shares at par value.
'It could be worth more, but certainly relative to the market it was generous,' said analyst John Skomba of Walwyn Stogell Cochran Murray Ltd.
Selkirk said its board appointed a committee of directors to evaluate the proposal and respond Oct. 22.
Analysts said Selkirk could be an attractive acquisition. The company holds interests in six Canadian television stations, 14 radio stations and two cable television companies, including Selkirk Communications Inc. of Ft. Lauderdale, Fla. It also owns Seltel Inc. of New York, a television sales representation concern. Skomba said Rogers was 'a very aggressive company' and if successful in its bid must improve the profits of its target. Selkirk earned the equivalent of $8.9 million in 1986 on revenue of $123.8 million.
Analyst Ann Jackson of Capital Group Securities Ltd. said Rogers' timing was 'impeccable' because many problems now face Selkirk.
She did not believe broadcast regulators would reject the proposal but would not speculate on whether Selkirk directors would support the bid.
Media conglomerate Southam Inc., which holds a major Canadian newspaper chain, owns 42.5 percent of Selkirk's class A shares and 20 percent of the class B voting shares. The remaining 80 percent of the voting shares is held by eight shareholders in a voting trust.
