The proposed sale of Canadian film distributor Motion Picture Distribution LP (MPD) is mired by low-ball offers, according to Movie Distribution Income Fund, the publicly-traded entity which owns 49 per cent of MPD's limited partnership.

Alliance Atlantis (AAC) owns the controlling 51 per cent. AAC is in the process of being sold to media company CanWest and US bank Goldman Sachs for US$2.3bn.

While CanWest plans to take control of AAC's broadcast assets, Goldman Sachs, which is the majority financier of the purchase, planned to take control of MPD under the aegis of a Canadian partner. Canadian law prevents foreign control of film distribution companies, except for the grandfathered Hollywood majors.

However, the Fund has argued that it has a say in Goldman Sachs' choice of partner and how much the Fund's unit-holders should be paid per unit. It announced in a release today that the bank's proposed offer for the Fund's 49 per cent share is less than what it is paying for AAC's 51 per cent. It also says the bank's offers have been less than previous third party offers. Further, should, for example, the Fund itself establish a partnership and seek to buy Goldman Sachs out following the original CanWest transaction, the bank 'has advised it would not be willing to sell its interest in MPD '

The release also cites that Goldman Sachs' proposals have been conditional upon waiver of the Fund's consent right and a 'unilateral determination of transaction structure.'

Rubin Osten, chair of the Fund's Special Committee said, 'We remain optimistic that discussions with Goldman Sachs will continue and that we will be able to achieve both of these goals.. However, there can be no assurances that any such discussions will result in a firm offer by Goldman Sachs for the units of the Fund at a price that reflects fair market value, if at all.'