Quebecor buys back Caisse’s $1.69B stake in media company

Quebecor Inc. has signed a deal to buy the remaining stake in Quebecor Media Inc. held by the Caisse de depot et placement du Quebec for $1.69 billion, while consulting company CGI has also agreed to buy back shares from the institutional investor.

The move to acquire the 18.47% interest in the media group will give Quebecor complete ownership of the business.

“Thanks to its currently very favourable financial profile and the substantial amount of cash it has on hand, Quebecor is now in a position to complete the repurchase of the share capital of Quebecor Media initiated in 2012,” Quebecor chief executive Pierre Karl Peladeau said in a statement.

“By gaining access to 100% of the cash flows that it generates, Quebecor will now be better equipped to seize business opportunities that arise. Ultimately, these transactions will allow us to have complete control over our destiny.”

Under the deal, the Caisse will receive $1.54 billion in cash and $150 million in convertible debentures that will be convertible into Quebecor class-B shares.

The convertible debentures will have a six-year term maturing in 2024 and will bear an annual interest rate of 4.0%.

Read: Equities fuel 9.3% return for Quebec pension fund manager in 2017

Caisse chief executive Michael Sabia said the deal allows the pension fund manager to reallocate the money to new investment opportunities in Quebec companies.

“Through the convertible debenture, la Caisse maintains an interest in the business, while providing Quebecor with increased financial flexibility to pursue its growth plan,” Sabia said in a statement.

The deal, which is subject to the customary closing conditions and regulatory approvals, is expected to close by June 22.

The announcement came as Quebecor doubled its quarterly dividend to 5.5 cents per share and reported its first-quarter profit grew compared with a year ago.

Quebecor reported a profit attributable to shareholders of $56.7 million or 24 cents per diluted share, up from $3.9 million, up from two cents per diluted share a year ago.

Revenue totalled $1.01 billion, up from $1.00 billion.

CGI intends to buy back shares held by Caisse

Consulting company CGI will buy back 3.63 million of its shares held by the Caisse for $75.06 per share, it announced on Tuesday.

The Caisse will continue to hold approximately 42.6 million shares of CGI, about 15.1% of the the company’s total outstanding shares.

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