Quebecor increases stake in Quebecor Media
Quebecor CEO Pierre Karl Peladeau. (SIMON CLARK/QMI Agency)
MONTREAL — Quebecor Inc. is increasing its stake in media subsidiary Quebecor Media Inc. in a $1.5-billion buyback from the Caisse de depot, Canada's largest pension-fund manager.
The Caisse will reduce its 45.3% stake in Quebecor Media by almost half, the companies announced Wednesday.
Quebecor's stake in its media division will increase to 75.4% from the current 54.7%.
Quebecor CEO Pierre Karl Peladeau said his company took advantage of good debt-market conditions to invest in its media subsidiary.
"We believe in the company's future," he said in a statement. "Repurchasing a portion of the Caisse's investment, while we continue our partnership, will allow us to benefit from the company's expected growth over the next few years."
Quebecor Media, owner of Sun Media, will buy back 20.3 million shares held by the Caisse for $1 billion in cash.
The parent company will also repurchase nearly 10.2 million Quebecor Media shares from the pension fund.
In return, Quebecor will give Caisse members $500 million in debentures convertible into Class B shares.
The Caisse's stake in Quebecor Media will drop to 24.6%, equivalent to 25.4 million shares, once the deal is finalized on Oct. 11.
Quebecor Media is one of Canada's largest media companies with more than 16,000 employees.
Through Sun Media Corporation, the firm is the largest publisher of newspapers in Canada.