Canwest, Shaw Divide, Conquer Wic's Assets

Following 18 months of negotiations, CanWest Global Communications Corp. and Shaw Communications Inc. finally struck an apparent deal to divide the assets of Vancouver-based media powerhouse WIC Western International Communications Ltd.

A similar deal reached last year between CanWest Global and Shaw to split up WIC fell apart because of tax implications.

Under the revised deal, Calgary-based Shaw, a cablecaster, would secure WIC's interest in Canadian Satellite Communications Inc., a direct-to-home satellite signal provider.

Shaw's new media division, Corus Entertainment, will also get WIC's 12 radio stations, pay and pay-per-view and specialty channels, among other assets.

For its part, Winnipeg, Manitoba-based CanWest Global will walk away with WIC's nine conventional TV stations nationwide, including two in Alberta, where the broadcaster has had no presence until now.

Besides allowing CanWest Global to become a national network, Friday's deal will also mean acquiring WIC's direct and indirect interests in ROBTv, a new business cable channel, and other cable assets.

Shaw, which owns 49.9% of WIC's voting A shares and 52% of its nonvoting B shares, has tried since May 1998 to strike a breakup agreement with CanWest Global, which owns 44% of WIC.

Those negotiations were complicated by the aggressive corporate style of Shaw and CanWest Global, which have expanded significantly in recent years as the Canadian TV sector consolidates and opens to foreign competition.

The WIC shares held by CanWest Global and Shaw have been in trusteeship until the companies could finalize their breakup agreement, expected to occur by Nov. 1.

The next step is for both companies to bring their deal before the Canadian Radio-television and Telecommunications Commission for regulatory approval.

The CRTC in April canceled an earlier hearing on the ownership of WIC to give CanWest Global and Shaw further time to wrangle over the broadcast assets.

Both companies on Friday asked the CRTC to delay another hearing planned for Oct. 26 to consider their applications for regulatory approval to split up WIC, whose assets include the Family Channel and Teletoon, Canada's cartoon channel, and pay TV services, including Superchannel and MovieMax.