Shaw share sale could help Corus

Corus Entertainment Inc. watched its share price plunge after Shaw Com

munications Inc. sold its stake in the television network owner, a plot twist analysts saw coming as part of Shaw’s long-term plans to shed media assets and focus instead on its higher-growth wireless business.

Calgary-based Shaw announced after markets closed Tuesday it agreed to sell 80.63 million class B Corus shares for $548 million or $6.80 per share. A group of banks led by TD Securities Inc. bought the entire stake and will sell it off to smaller investors after Shaw couldn’t find a single buyer, in part due to Canadian ownership restrictions.

Toronto-based Corus’ stock price fell almost 17 per cent to $6.70 Wednesday, erasing about half of the 65 per cent year-to-date price growth following its performance in 2018 when it fell to a record low.

The sale didn’t come as a surprise to Corus chief executive Doug Murphy, who said it won’t change the business.

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“We have always anticipated the eventual sale of these shares at such time as determined by Shaw Communications,” Murphy said in a statement. “Our business operations remain unchanged as a result of this transaction, and we look forward to continuing to execute our strategy as we evolve and grow our business to create value for all of our stakeholders.”

Corus was created in 1999 as a spinoff of Shaw so Corus could focus on content and Shaw on delivering it through cable. In 2016, Shaw sold Corus the rest of its media assets for $2.65 billion, using the proceeds to buy wireless upstart Wind Mobile, now called Freedom Mobile. As part of the transaction, Shaw received 71 million Corus shares that were worth about $800 million at the time.

It’s been a tough few years for traditional broadcasters, who are fighting to sustain subscription and advertising revenues as audiences spend more time online. Despite the challenges, Corus’ financial results have topped analysts’ expectations in past two quarters thanks to some advertisers returning to TV.

Industry analyst Kaan Yigit, president of Solutions Research Group, said Corus has a decent collection of assets, but that the new world