MONTREAL – Let the bidding begin.
Some suitors have begun posturing for the right to buy the Montreal Canadiens while others are still anonymous. The price tag is expected to be steep – with bids to exceed $400 million and reach as much as $500 million.
At least two groups have confirmed bids for the century-old hockey franchise – one from three Molson brothers and the other from a consortium spearheaded by Quebecor Media.
And according to reports, a few others with strong Quebec ties may also be in the mix to buy the club, which is currently owned 80 per cent by American George Gillett. Molson-Coors (TSX:TPR.B) owns the remaining 20 per cent.
Newspaper reports have identified a group led by millionaire Stephen Bronfman, chairman of Claridge SRB Investments Inc. and heir to the Seagram empire.
Another potential buyer could be Roustan Capital, an American company headed by Montreal native W. Graeme Roustan, who resides in Florida and also owns the Bauer Hockey equipment company.
Calls by The Canadian Press to spokespeople for Bronfman and Roustan went unreturned Thursday.
Sports economists say a bidding war is likely and that it isn’t clear if it will be wrapped up before a National Hockey League board of governors meeting at the end of the month.
“How fast it’ll go depends entirely on Mr. Gillett,” said Bruno Delorme, a marketing professor at Concordia University.
“We don’t know for sure he wants to sell it at this point. The puck is in Mr. Gillett’s court and it depends on how indebted he is.”
Meanwhile, provincial Finance Minister Raymond Bachand reaffirmed a $100-million loan is available to a potential buyer of the club, with one proviso – they must be from Quebec.
Bachand, speaking to reporters at the legislature, said he hopes to keep the club out of the hands of a foreign billionaire who wouldn’t treat the club with the respect it deserves.
“I think the money would be well invested for groups that have the interest of Quebec at heart,” Bachand said, adding the public money would be protected.
In 2001, the Caisse and two banks provided loans worth $140 million to help Gillett buy his majority stake in the franchise and 100 per cent of the arena, then known as the Molson Centre, for $181 million.
But Michel Poitevin, head of the economic sciences department at the Universite de Montreal, says having a Quebec owner is irrelevant.
He cites Gillett’s track record in the community and his immense success in rebuilding the Canadiens’ name in his time as owner.
“I think it’s not important at all and I don’t understand why the government is doing it,” Poitevin said.
“I don’t think the identity or the ethnicity of nationality of the owner is that important.”
Public funds are at play in the transaction. Quebecor Media is 45 per cent owned by the Caisse de depot et placement du Quebec, the province’s pension-fund manager.
All of those involved have signed confidentiality agreements keeping the terms under wraps.
Quebecor Media, a subsidiary of Quebecor Inc. (TSX:QBR. A, TSX:QBR.B), said Wednesday it is leading a consortium with the Solidarity Fund of the Quebec Federation of Labour and with a company owned by Rene Angelil, Celine Dion’s husband and manager.
The media giant owns the Sun Media chain of newspapers including Le Journal de Montreal, Quebec television network TVA and the Videotron cable company.
Adding the Canadiens makes perfect sense but getting a consortium as diverse as the one Quebecor has proposed could be difficult.
“You have different perceptions, different goals, different sets of values, different levels of finances, so yes, it can be complicated,” Delorme said, citing the current woes of the Atlanta Thrashers group as an example.
“The less the better in my opinion.”
Geoff Molson said he and his brothers Andrew and Justin have assembled a “solid and credible” group of investors to bolster their bid.
The rumoured investors in the Molson bid include Quebecor arch-rival BCE Inc. (TSX: BCE), which already owns naming rights to the Habs home rink.
The offer “has all the ingredients” needed to satisfy both the seller and the NHL, Geoff Molson said.
The Molson family is no stranger to the NHL – its has been associated with the franchise since 1957, when brothers Thomas and Hartland Molson acquired the team from Senator Donat Raymond.
During the period the family controlled the team, the Canadiens won 11 of their 24 Stanley Cups.
“From an emotional point of view, the glory days of the Montreal Canadiens was when the Molsons owned it,” said David Lank, director emeritus of the Dobson Centre for Entrepreneurial Studies at McGill University.
“So to come full circle for the next generation of the Molsons and the next generation of the Canadiens, there’s a certain poetic justice to it.”
The Molson family’s involvement prompted former Habs defenceman and GM Serge Savard, a Montreal real-estate developer, to pull his bid off the table.
Quebecor president Pierre Karl Peladeau, meanwhile, called the Canadiens “one of the most prestigious and iconic sports franchises in the world.”
“The team has been part and parcel of our history for 100 years,” he said in his statement. “We therefore regard this as a golden opportunity for a Quebec group to return this grand institution to local ownership.”
Gillett said earlier this spring he had retained BMO Capital Markets to determine how he might maximize his holdings.
Even though it is aligned with the Quebecor bid, the Solidarity Fund is in discussion with various groups to invest in the Canadiens.
“It’s not exclusive and we’re in discussions with many groups,” said spokeswoman Josee Lagace.
“The transaction itself interests us and the Montreal Canadiens interest us – for the value, for the symbolism, the financial transaction and the benefit it brings to our shareholders.”