Shaw Sees Cable, Media Consolidation In Canada

Shaw Communications Inc. CEO Jim Shaw said his recent takeover bid for rival Moffat Communications Ltd. might be the first move in a new round of consolidation in Canada's cable television and media industries.

Predicting that cable and media companies will continue to merge at a furious pace during the coming year, Shaw said he's eyeing smaller companies that own programs and specialty cable channels that could be valuable to TV and Internet distributors, including his No. 2 Canadian cable system. The catch, though, will be persuading the current owners to sell.

When the Moffat acquisition closes, Shaw's cable business will encompass almost 90% of the country's subscribers west of Ontario. He said further consolidation is needed as companies cut programming costs and increase subscribers to compete with rivals.

"There's another round of consolidation coming in the cable industry," Shaw said. "Companies like Astral, Alliance Atlantis and CHUM — they're all going to get bought." Shaw said he would be interested in buying Astral, Alliance or CHUM. But after the Moffat purchase, most analysts expect Shaw to wait before buying another company.

In related news, Cogeco Cable Inc., Candada's fourth-largest cabler, said Wednesday that it has bought Decibel Inc., a smaller Quebec rival with 6,600 subscribers, for CAN$11.2 million ($7.3 million).