Under terms of the deal, Montreal-based Cogeco and Bell Globemedia of Toronto, will jointly acquire Quebecor's 86 per cent stake in TQS. Cogeco will hold 60 per cent, while Bell will hold 40 per cent. Cogeco already held a 13 per cent stake in TQS.
"Cogeco will actively participate in TQS' continued expansion," Louis Audet, Cogeco's president and CEO, said in a release. "The regrouping of TQS with our television stations lays a strong foundation for the new network and ensures its profitability. Our association with a quality partner such as Bell Globemedia bodes well for the future."
TQS is a rival to TVA Group Inc., Canada's largest French language broadcasting group. The Canadian Radio-television and Telecommunications Commission approved Quebecor's purchase of TVA on July 5, but required the media conglomerate to sell TQS to maintain a healthy and competitive environment. Quebecor acquired TVA as part of last year's $5.4 billion takeover of Groupe Videotron Ltee. If Quebecor did not sell TQS, it would gain control of more than half of all French-language TV advertising revenues in Quebec.
Cogeco and Bell Globemedia will create a joint venture regrouping the TQS network and Cogeco Radio-Television Inc.'s six TV stations in Sherbrooke, Trois-Rivières and Chicoutimi/Jonquière.
Cogeco will transfer to the joint venture the six TV stations, as well as its 13 per cent interest in TQS. The cable company tagged a value of $104.4 million on these assets. Bell Globemedia will contribute the $74 million in cash to buy out Quebecor's stake in TQS.
The companies said they will make an offer to buy out the shareholders who hold the remaining 1.06 per cent of TQS' shares.
Bell Globemedia, majority owned by Bell Canada Enterprises, owns CTV, The Globe and Mail, Internet content provider Globe Interactive and Sympatico-Lycos, the top Canadian Internet portal.
