Alliance Atlantis Communications has hung a for sale sign onits majority-owned releasing arm, Motion Picture Distribution (MPD).
The decision, announced today, to "explore ownershipalternatives" comes after months of speculation and much internal acrimony. InJuly of this year MPD chairman Victor Loewy and two senior MPD executivesabruptly left the company amidst accusations of a management-engineeredbuy-out. A pivot in the corporate saga is a key-man clause in the outputagreement between MPD and New Line Cinema that gives New Line the right toterminate the agreement should Loewy leave the company.
Those issues were settled out of court in late September:Loewy was re-instated at MPD in the role of chairman emertius while the companycame to undisclosed arrangements with former MPD CEO Patrice Theroux and formersenior counsel Paul Laberge.
Today's announcement brings a fresh round of speculation, asindustry watchers anticipate seismic changes in the normally placid Canadiandistribution landscape. In August, London-based Marwyn Investment ManagementLLP made an offer of $370m for the company.
Loewy will be integral to any new iteration of MPD. When NewLine Cinema agreed in September to continue its output deal with the companyuntil the end of 2008, the terms reconfirmed the key-man clause. MPD's valuewithout Loewy and hence New Line, would be considerably diminished. The LordOf The Rings trilogy is estimated to haveearned the company $44m (C$50m) per picture.
Alliance Atlantis controls 51% of MPD while the remaining49% is controlled by Movie Distribution Income Fund. MPD operates two Europeandistribution companies, Momentum Pictures in the UK and Aurum in Spain.