ContentFilm has called off a possible deal with Peace Arch Entertainment.
Peace Arch Entertainment Group had entered into a letter of intent to acquire ContentFilm in late December in a deal to be worth 19,500,000 Peace Arch shares plus cash of $35m.
Content said that since December 'there have been several circumstances that have made it more difficult to conclude the PAE transaction as contemplated' including a drop in Peace Arch share price, difficult capital markets and delays in a Peace Arch audit. At the same time, ContentFilm said it had seen positive developments related to its acquisition of the CBC library and an outlook for strong growth in the 2009 fiscal year.
In a statement, ContentFilm clarified: 'The Board believes that given the strong prospects for the Company, shareholders' best interests would be served by the Company remaining as an independent entity. The Board has therefore decided to conclude its strategic review with immediate effect. For the avoidance of doubt, the Board confirms that it is no longer in talks with any other parties regarding a potential offer for the Company.'
Peace Arch, based in Toronto, Los Angeles, New York and Vancouver, has three operating divisions: film, television and home entertainment.
ContentFilm has film sales/finance arm ContentFilm International, primarily TV sales division Fireworks International, and US DVD arm Allumination FilmWorks.
Peace Arch is listed on the Toronto stock exchange and Content on London's AIM.
ContentFilm CEO John Schmidt added: 'We have had a challenging year, but we are extremely excited about the prospects for the Company. The television business has continued to thrive this year, and we have brought two strategic deals into its operations - the acquisition of the CBC library and the representation of the Harmony Gold library. Our digital sales business has found its footing and is showing real results. There are some expansion opportunities in this area that we are pursuing and that we expect to announce to shareholders in the near future. The film sales company has once again handled some of the top independent films of the year and we look forward to continuing the growth of this division. Allumination has had a disappointing year, but we are now actively pursuing alternatives that will strengthen this division.'