CHUM completes $265 million purchase of Craig Media and financing

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Client

CHUM Limited

December 2004
On December 1, 2004, CHUM Limited announced the completion of its purchase of all of the shares of Craig Media Inc., which includes the three "A Channel" conventional television stations in Edmonton, Calgary and Winnipeg; CKX, a CBC-affiliate station in Brandon; digital specialty channels MTV, MTV2 and TV Land; and local station Toronto 1, for $265 million (less a preliminary working capital adjustment of $5.1 million) on a debt-free basis. In order to finance this transaction, CHUM completed the re-financing of its outstanding credit facility with a syndicate of lenders, led by Royal Bank of Canada and The Toronto-Dominion Bank. The new credit facility, which is for $500 million, will mature on November 30, 2009 and is unsecured.

A condition of the Canadian Radio-television and Telecommunication Commission's approval for the purchase of Craig Media was that CHUM divest itself of Toronto 1. The $46 million sale of Toronto 1 to TVA Group Inc. and Sun Media Corporation, both subsidiaries of Quebecor Media Inc., was completed on December 2, 2004. The transaction also included CHUM obtaining Sun Media's 29.9% ownership interest in southern Ontario cable news channel CablePulse24 (CP24), valued at $8 million. CHUM currently owns a 70.1% majority interest in CP24.

CHUM Limited was represented by in-house counsel Denise Cooper and Peter Miller and an outside team of counsel from Fasken Martineau led by Roxanne McCormick and including Sean Stevens and Dan Rankin (mergers and acquisitions); Janice Javier and Angela Giancaterini (corporate); Alan Schwartz and Mitchell Thaw (taxation); Dan Law, Marc Vaturi and Alysha Valenti (real estate); Ralph Nero and Ian Campbell (labour and employment); Peggy McCallum and Tyrone Medley (pensions); and Angela Di Padova (competition).