BCE Inc. and Rogers Communications announced Friday that the two companies have partnered together to acquire a majority share of Maple Leaf Sports and Entertainment for $1.32 billion.
The two companies will each pay the current owner - the Ontario Teachers' Pension Plan - about $533 million for a 37.5 percent share and 75 percent combined.
"We will continue to cheer for the teams and look forward to celebrating their success, but after the summer, from the sidelines," Jane Rowe, senior vice-president of Teachers' Private Capital said at a news conference.
"MLSE teams are among the most popular major-league franchises in North America, iconic sports brands watched and loved by millions of fans across our nation," said George Cope, President and CEO of Bell Canada and BCE in a statement.
"As Canada's largest and most established communications company, Bell is proud to be part of this all-Canadian acquisition of a world leader in sports and entertainment. Bell's ownership in MLSE supports our promise to deliver the best content to Canadians across every screen. With our advanced broadband network investments, next generation Bell TV, Mobility and Internet services, and leading sports networks TSN and RDS, the Bell team looks forward to bringing the Leafs, the Raptors, the Marlies and Toronto FC to fans in new and innovative ways."
Bell's net cash commitment, following a planned leveraged recapitalization of MLSE, will total $398 million, representing a 28 percent equity interest in MLSE, and will be funded with cash on hand at closing. Through a co-investment arrangement with Bell, the BCE Master Trust Fund, an independent trust that holds and manages pension fund investments serving the pension obligations of BCE Group pension plan participants, will contribute $135 million toward the MLSE acquisition.
Maple Leaf Sports and Entertainment runs the Toronto Maple Leafs hockey club, the NBA's Toronto Raptors, Toronto FC of Major League Soccer, the American Hockey League's Toronto Marlies and the Air Canada Centre.
The company also has real estate holdings and television properties that include Leafs TV and Raptors TV.
For BCE Inc., the deal also confirms the company's long-standing association with and ownership in the Montreal Canadiens. "Our investment in (the) Montreal Canadiens has been tremendous for Bell in our markets in Quebec and quite frankly that investment will be maintained," said Cope.
As part of the agreement, Kilmer Sports Inc. (KSI) - owned by Toronto businessman Larry Tanenbaum - will increase its current 20 percent stake in the company to 25 percent.
"I am excited to welcome our new partners Bell and Rogers," said Tanenbaum in a statement. "I am proud this is a Made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch. This is a terrific path forward for our teams and our fans. It will ensure MLSE continues to make a positive impact in Toronto and across this great country of ours."
Tanenbaum will also remain as chairman of MLSE and as a governor of the NHL, the NBA and Major League Soccer.
The transaction is expected to close in mid-2012 following required regulatory and league approvals.