The other 51 per cent will be controlled by Goldman Sachs, part of the US investment bank's over-arching deal with CanWest Global to acquire MPD's parent company, Alliance Atlantis Communications. Fund unit holders will receive C$10 per unit.
According to a joint announcement from EdgeStone and Goldman Sachs, it is anticipated a company controlled by EdgeStone will own the distribution business following the sale. That detail is germane because Canadian law limits foreign ownership of distribution and broadcasting. The involvement of Goldman Sachs, particulary regarding the controlling interest in MPD, is a red flag to cultural nationalists. Although it mainly distributes US films, MPD remains the largest Canadian-controlled film distributor.
Minister of Canadian Heriitage Bev Oda has said the deal is subject to the same regulation as any other proposed take-over. The Investment Canada Act of 1987 states explicitly: 'takeovers of Canadian owned and controlled distribution businesses will not be allowed.'
MPD chairman emeritus Victor Loewy is rumoured to be in the running for the top job at the new company. Loewy did not return phone calls requesting verification.
Toronto-based EdgeStone has managed more than C$2.3bn of private capital. It is part of the GMP Capital Trust Group, which also hold an equity stake in the new company.
In a statement, Gilbert Palter, chief investment officer and managing partner of EdgeStone said, 'We look forward to providing additional funding and strategic support to help Motion Picture Distribution capitalize on its many growth opportunities and continue to offer the superior Canadian content for which the company is known.'
Added EdgeStone partner Sandra Cowan, 'We are entirely committed to ensuring that MPD continues to play its important cultural role in Canada, to ensuring an experienced and dedicated management team, and to strengthening the company,'
Fund unit holders are expected to vote on the sale on August 3. Already four of the Fund's largest unitholders - Goodman & Company, Investment Counsel Ltd./Dynamic Funds, TD Asset Management, Gluskin Sheff + Associates and Lawrence Asset Management Inc., representing approximately 30 per cent of the fund units - have agreed to vote in favour of the transaction.