BILDERBERGER BLACK'S
HOLLINGER MEDIA EMPIRE
FUSES WITH CANWEST IN THE
BIGGEST MEDIA DEAL IN CANADIAN HISTORY.

THE GLOBAL SOCIETY CONTINUES TO UNFOLD

July 31, 2000
To all Employees of CanWest Global Communications,

CanWest Global Communications Corp. today announced the largest transaction in the history of the Canadian media industry. We have agreed to acquire 100% of the principal metropolitan newspapers of the successful Hollinger newspaper chain in Canada, together with most of the community newspaper operations, all of its Canadian Internet properties, the magazine group, and a 50% interest in the National Post and to merge those properties into CanWest.

Under the terms of the deal, CanWest acquires most of the Canadian operations of Hollinger, including 13 large and mid-market metropolitan English language dailies (Ottawa Citizen, Montreal Gazette, Halifax Daily News, Vancouver Sun, Calgary Herald, and Edmonton Journal, among them); 129 smaller daily, weekly and community newspapers in the Community newspaper group; the more than 86 periodicals in the Southam Magazine and Information Group, which include a number of national trade publications; internet properties such as Canada.com; and 50% of the National Post The transaction is valued at approximately $3.5 billion. As part of the consideration, Hollinger will be taking a 15% equity position in CanWest and will nominate two members to an expanded eleven member CanWest Board of Directors.

CanWest took the decision to acquire these excellent Hollinger properties against the background of rapidly evolving and converging media, the growing importance of the Internet, and the proliferation of media consolidations. These developments will change the way Canadians routinely access news, information and entertainment, communicate for business, and ultimately affect the way Canadians shop. This historic union that brings together the assets of two major Canadian media companies, each a profitable leader in its field, will position CanWest to take full advantage of these 21st Century new-media realities.

I fully expect this important acquisition will open up new opportunities for you, the staff of CanWest across Canada and around the world. All employees will have the amplified resources of a large integrated media company behind them. Synergies between conventional and specialty television services, national and community newspapers, and our growing portfolio of Internet properties will no doubt create new opportunities for greater exposure of your work to even bigger audiences. This acquisition of excellent Hollinger publishing and Internet assets is a tremendous deal for CanWest. The merger is a giant step forward in securing a bright future for independent Canadian media, and a great day for Canadian on-air and print journalists who will have more opportunities than ever before to tell Canadian stories to Canadians across the country.

Our task now is to combine our powerful brands and unmatched content production resources for news, entertainment and information, with the unparalleled CanWest track record in aggregating and exhibiting popular content. Our goal is to employ all these assets together to link advertisers to customers better than ever before. We will also create new interactive opportunities for buyers to transact business and generate new revenue streams. More than ever before, with this transaction CanWest is now content rich, advertiser friendly and e-commerce ready.

We have achieved today our goal of being the leading advertising sales and content owners in the country. We have fulfilled our objective of becoming leaders in news and information. We have vaulted into a leadership position on the Internet and we will undoubtedly grow that through our video capabilities which will propel the combined gloabaltv.com and canada.com groups into the broadband age of the Internet. Nevertheless, we intend to keep growing because our goal is none other than to share the world stage with the most successful media companies. That means, for CanWest continued growth internationally and in the area of content for domestic and international consumption.

It is also noteworthy that we will greatly expand our involvement in local markets just as the CBC cuts back on its regional services. Having the resources of television, newspapers, and locally oriented news, information and e-commerce portals means that working together we will do a better job meeting the needs of Canadians in communities across the country. As for the integration of the assets of the two companies, we will be holding detailed discussions with the management and staff at our various locations. For the next year or so, we will have the support of top Hollinger management at the publishing properties to ensure consistency and to help us to develop an orderly integration plan. I welcome your support and participation as we move ahead.

I know you will have many questions in the coming weeks, You can be sure that senior management will continue to communicate frequently with staff, to keep you informed of our progress and in due course we will describe to you more fully our strategy for the exciting times ahead. We are at the dawn of a new age armed with the people, the brands and the assets to succeed.

Sincerely,
Leonard Asper
President and Chief Executive Officer


July 31, 2000 For immediate release

CANADIAN MEDIA GIANTS ANNOUNCE LANDMARK CONVERGENCE DEAL

CanWest Signs $ 3.5 Billion Deal to Acquire Hollinger's Canadian Metropolitan Newspapers, Magazines and Internet Assets and most of the Community Newspapers

Winnipeg, Canada: CanWest Global Communications Corp. today announced the largest transaction in the history of the Canadian media industry. CanWest, owners of Canada's most popular national television network, Global Television, has agreed to acquire 100% of the principal metropolitan operations of the successful Hollinger newspaper chain in Canada, together with all of its Canadian Internet properties, its magazine group, most of the community publishing operations and a 50% interest in the National Post. The merged company will have complete and unparalleled national and local coverage in both electronic and print media, plus the canada.com network, a leading group of national and local Internet sites. Valued at $3.5 billion, the transaction will see the reunion of two of Canada's most successful entrepreneurs, Israel Asper, Executive Chairman of CanWest, and Conrad Black, Chairman of Hollinger Inc., who did their first deal 22 years ago when CanWest acquired Crown Trust on a handshake between Mr. Asper and Mr. Black. Hollinger will become CanWest's second largest shareholder, after the Asper family.

CanWest will pay cash of $2.2 billion and approximately $600 million in the form of 24.3 million Non-Voting Shares valued at $25 per share and 2.7 million Multiple Voting Preferred Shares at a premium of $3.75 over the price of non-voting shares, from its treasury to the Hollinger group as consideration for the acquisition of the print and Internet assets, described in the Backgrounder attached to this news release. As well, the vendors will take back a 10-year subordinated debenture in the amount of $700 million. Financing for the transaction has been underwritten by a consortium co-led by the Canadian Imperial Bank of Commerce and the Bank of Nova Scotia.

The purchase price is based upon a valuation of 10X year 2000 earnings (EBITDA) for Hollinger's principal print assets with certain adjustments. CanWest believes that the adjustments on closing will reduce the price to approximately 9.5X earnings before corporate efficiencies.

CanWest believes that post-2000 efficiencies to be gained in the merger will result in annual savings of between $50 and $150 million, which should make the transaction accretive to cash earnings per share by the end of fiscal 2002.

The transaction will see Hollinger acquire a 15% share and just under a 6% voting interest in CanWest. Two Hollinger executives, including Mr. Black, will join the expanded 11 person CanWest Board.

"This union of Hollinger's popular and profitable Canadian publishing and Internet assets with CanWest's powerful television broadcasting properties is a tremendous deal for CanWest and its shareholders, " said CanWest Chairman Israel Asper. "The merger is a giant step forward in securing a bright future for a vibrant and independent Canadian media sector. It's also a great day for Canadian journalists, who will have more opportunities than ever before to tell Canadian stories to Canadians across the country."

Hollinger Chairman Conrad Black said, "This deal represents a remarkable merger of successful entrepreneurial cultures that can only magnify the prospects of our joint endeavours. The Hollinger print and Internet properties bring to CanWest the proven and extremely valuable additional content, financial, technical and market capacity to enable CanWest to forge ahead on innovative business solutions for advertisers in the new-media environment."

Specifically, and in addition to 50% of the National Post, the transaction includes 13 large metropolitan English language dailies; approximately 136 daily and weekly newspapers and shoppers in smaller communities; 85 trade publications and directories in the Southam Magazine and Information Group; and, all of the Hollinger and Southam Internet properties. The merged assets do not include Hollinger's French language newspapers and certain of its other non-metropolitan properties that Hollinger has indicated it will selectively sell or retain. (See attached Backgrounder for details)

"This merger is the ultimate convergence transaction. It unites the powerful conventional media of print and electronic content with the 21st century online, interactive and immediate technology of the Internet." said Leonard Asper, President and Chief Executive Officer of CanWest. "With this enormous mass of news, information and entertainment content, plus a merging of Hollinger's successful canada.com, careerclick.com, and carsclick.com sites, together with Hollinger's newspaper sites, canada.com's city portals and our existing globaltv.com and specialty content web sites, CanWest is poised to take a leadership position in media convergence, technological revolution and interactive new-media with absolute confidence."

Tom Strike, CanWest's Chief Operating Officer, who led the negotiation of the final deal with Hollinger, following the handshakes of the Aspers with Mr. Black on the concept, said, "This development will eventually change the ways that Canadians routinely access news, information and entertainment, conduct business communications and even the way people shop. This historic union of leaders in their sectors will position CanWest to walk confidently on the information highway, regardless of which delivery system eventually becomes dominant in the marketplace.

Ravelston, Hollinger's parent company, has, at CanWest's request, agreed to remain in management of the wholly-acquired publications for at least 17 months, in order to maintain continuity and to provide time to work out an orderly transition plan for full integration of the assets with those of CanWest. The Hollinger Internet properties will be integrated with CanWest immediately upon closing.

As well, as part of the partnership, Hollinger will continue to manage the National Post for the next five years, to enable that newspaper to realize its potential to become Canada's most profitable national newspaper, before turning the newspaper over to joint CanWest/Hollinger management. However, cross-fertilization between the National Post and The Global Television Network will begin immediately. Mr. Black will continue as Chairman of the National Post. CanWest will appoint a co-chariman, with equal representation from CanWest and Hollinger on its Board of Directors.

"Our task now is to combine the powerful CanWest and Hollinger brands and their unmatched content production resources for news, entertainment and information, with CanWest's unparalleled track record in aggregating and exhibiting popular content," said Leonard Asper. "Our goal is to employ all of these assets to provide maximum linkages between advertisers and their customers. We also intend to create new interactive opportunities for buyers and sellers to transact business, thereby generating new revenue streams for our company. More than ever before, with this transaction, CanWest is now content rich, advertiser friendly and e-commerce ready."

The transaction is subject to regulatory approval, including by the Canadian Competition Bureau, to which application for approval has already been made. As well, during their next license renewals, CanWest's Canadian television broadcasting properties will seek to reassure the Canadian Radio-television and Telecommunications Commission (CRTC) that this transaction will, in no way, diminish the diversity of Canadian voices, choices and editorial opinion in the interpretation of Canadian and international news and information to Canadians.

Israel Asper, who conceived and initiated the merger terms with Mr. Black, said, " We are well aware of, and sensitive to, the public policy concerns about cross-media ownership. We intend to meet with the CRTC immediately to discuss how best to ensure that the public interest is protected, while not foregoing achievement of the corporate efficiencies of this media convergence transaction. As well, we will meet with provincial premiers and mayors across the country to assure them of our ongoing commitment to balance and diversity of editorial voices in the local media. We also look forward to discussions with the relevant labour unions to solicit their support in modernizing the Canadian communications industry and equipping the industry to prosper and provide more good jobs in the challenging times ahead. "

CanWest Global Communications Corp. (NYSE: CWG; TSE, WSE: CGS.S and CGS.A; www.canwestglobal.com) is an international media company. CanWest owns, operates and/or holds substantial interests in conventional television, specialty cable channels and radio in Canada, New Zealand, Australia, Ireland, and the United Kingdom. The Company's program production and distribution division and interactive media division operate in several countries throughout the world.

This press release contains certain comments or forward-looking statements that are based largely on the company's current expectations and are subject to certain risks, trends and uncertainties. These factors could cause actual future performance to vary materially from current expectations.

For more information contact:
Geoffrey Elliot
Vice-President, Corporate Affairs
(204) 956-2025


BACKGROUNDER

CANADIAN MEDIA GIANTS ANNOUNCE LANDMARK CONVERGENCE DEAL

Highlights of Transaction:

    * The acquisition and merger of Hollinger's Canadian newspaper, magazine and Internet assets will create the largest multi-media news, information and entertainment content provider in Canada.

    * Combined revenues ~ $2.6 billion (2001e)
    * Combined EBITDA ~ $688 million (2001e)
    * Combined employees ~ 8500
    * Daily paid circulation ~ 1,288,311
    * Canada's premier network ~ 69 million page views/month of national and local Internet portals

    * The transaction is scheduled to close on or about September 30, 2000, however, the effective date will be August 31, 2000. Integration of most entities included in the transaction will begin upon Closing, while other integration matters will be constituted on January 1, 2000 to accommodate calculation of certain purchase price adjustments.

    * The integration of canada.com and the other Hollinger Internet assets with CanWest's Internet assets will begin immediately.

    Synergies from Convergence of CanWest and Hollinger Media Properties:

    * With the addition of the Hollinger properties and the 50% stake in the National Post, CanWest will become Canada's most comprehensive multiple platform media company, with a strong national and local profile in news, publishing, conventional and specialty television and the Internet, as well as in the production and international distribution of television entertainment programming and feature films.

    * CanWest will have the largest electronic and print information and news gathering capacity in Canada, with more journalists, editors and news gathering personnel than any other media operation in the country. The combination of print and television operations will provide unparalleled production resources to develop content applicable to newspapers, television, specialty cable television and Internet web sites.

    * The transaction will bring together Canada's most experienced and knowledgeable national and local Internet content providers, including one of Canada's most popular sites, canada.com. Hollinger's Canadian newspapers are leaders in developing national and local web sites and providing up-to-the-minute news and information to online users. CanWest's globaltv.com, with local platforms in major cities across Canada, is the most successful local television web site group in the country.

    * Television and newspapers remain unique in their access to mass audiences. The unprecedented CanWest combination of national and major city dailies, along with a national television network, local TV stations and specialty cable television networks, plus expanded information and special interest Internet sites and e-commerce portals, will enable CanWest to become Canada's most comprehensive advertising service provider. CanWest will furnish Canada's advertising community with the most complete one-stop advertising solutions to enable advertisers to penetrate mass and special interest audiences, as well as targeted demographics, all in the most efficient way possible.

    * Bringing together strong local market and national market brands in publishing, television and Internet properties will generate substantial marketing and cross-promotional opportunities.

    * Substantial cost savings should be realized from integration of back-office functions of CanWest and Hollinger.

These synergies will begin to be realized beginning in fiscal 2001.

Major Dailies Acquired by CanWest:

  1. The National Post (50%)
  2. Halifax Daily News
  3. The Telegram,
  4. St. John's
  5. The Guardian, Charlottetown
  6. Montreal Gazette
  7. Ottawa Citizen
  8. Windsor Star




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