After weeks of speculation, Canada’s Alliance Atlantis Communications revealed a complex offer for Halifax-based Salter Street Films. Salter, which produces such non-fiction fare as Michael Moore’s The Awful Truth, won the license for The Independent Film Channel Canada, a digital net with guaranteed-carriage, last fall. The film channel was the genre most cherished by industry titan AAC, among others.
Following a leak last November of a list of some of the winners in the latest round of specialty channel licensing, AAC moved quickly. AAC CEO Michael MacMillan confirms talks with Salter began in December. If the deal is approved by shareholders, and the channel transferred to aac by the CRTC (Canada’s regulatory body), the Toronto company will have a direct outlet for its film catalog, which may have been costly for Salter to access. While the ultimate value of the deal will fluctuate, MacMillan says the price should fall between US$49 million and $52 million. The sale is expected to close mid-May.
Salter chairman and CEO Michael Donovan and vice-chairman Paul Donovan, who hold all the multiple voting shares of the company, along with other holders of subordinate voting shares, have agreed to vote in favor of the deal. This group represents roughly 71% of the votes and about 25% of the total issued and outstanding shares of Salter. The production company went public in 1998.
Michael Donovan has said that his company had to gain a specialty license to grow to the proverbial next level. But, as a smaller player with no broadcasting experience, Salter Street had to convince the CRTC of, among other things, the need for diversity in broadcast ownership. If the regulator transfers IFCC ownership to AAC, some of that diversity will evaporate.
The Donovan brothers will remain with the company under three-year contracts, and the company’s production activities as well as the new channel, with Michael Donovan as chair, will stay in Halifax.