TORONTO - CHUM Limited announced on Friday that it has decided to sell 11-month old broadcaster Toronto 1 to a pair of Quebecor Media-owned companies for $46 million.
Quebec-based broadcaster TVA Group Inc. and Toronto's Sun Media Corporation, the two subsidiaries, will take control of the station under the agreement, pending regulatory approval.
CHUM committed to the divestiture of Toronto 1
as part of its purchase of Craig Media Inc., as announced on April 12, 2004. CHUM plans to hold onto Craig's A-Channels in Edmonton, Calgary and Winnipeg, as well as CKX-TV in Brandon and digital specialty channels MTV Canada, MTV2 and TV Land.
Both CHUM's purchase of Craig Media Inc. and the sale of Toronto 1 are subject to CRTC and other approvals and closing conditions customary for this type of transaction.
Craig Media launched the station in September of 2003 with high hopes and with plans to go much further, but Toronto 1 lost millions more than had been planned, and the entire Craig conglomerate was put on the block in early 2004.
TVA Group Inc. and Sun Media Corporation have agreed to file an application for the transfer of ownership and control of Toronto 1 with the CRTC by September 2, 2004, which is the deadline the Commission set prior to CHUM's hearing on the Craig purchase on September 7th.
"We are extremely pleased with the both the value and the timing of this transaction," said Jay Switzer, president and CEO, CHUM Limited. "This is an important step to completing our purchase of Craig Media Inc. and the fulfillment of CHUM's goals to expand our audiences across the country."
The purchase consideration for the sale of Toronto 1 is $46 million on a debt-free basis. This includes CHUM Limited 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.
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