Quebecor spends $500 million to buy further stake held by Caisse de depot

MONTREAL – Quebecor is spending $500 million cash to further reduce the Caisse de depot’s stake in the media conglomerate, 15 years after they joined forces for a transformational $4.9 billion purchase of the Videotron cable business.

Quebecor (TSX:QBR.B) says it has purchased 7.27 million shares held by a subsidiary of the province’s pension fund manager. It plans to finance the deal with debt.

With this deal, the Caisse holds 18.1 million shares of Quebecor Media or a nearly 19 per cent interest.

The Caisse originally held a 45 per cent stake in Quebecor’s media division following the purchase of the Videotron cable television business, which owned the TVA French-language television network.

The pension plan’s interest in Quebecor Media, which now includes telecom, television and publishing operations, was reduced to 24.6 per cent in 2012 when Quebecor invested $1.5 billion to increase its share to 75.4 per cent.

Quebecor chief financial officer Jean-Francois Pruneau said Wednesday the Montreal-based company’s long-term goal is to purchase the remaining shares in Quebecor Media, which employs nearly 12,000 people in Canada.

Under terms of the 2012 plan, the Caisse has until Jan. 1, 2019 to exit the partnership by selling its remaining interest in Quebecor Media, requiring the subsidiary be spin off through an initial public offering or selling its stake to a third party.

Caisse vice-president Christian Dube said the deal continues efforts started in 2012 to rebalance its portfolio.

“Following this transaction, we retain a significant stake in Quebecor Media, a company that continues to provide good prospects for value creation,” he stated in a news release.

Quebecor Inc. (TSX:QBR.B) is majority owned by Parti Quebecois leader Pierre Karl Peladeau, who oversaw the original partnership with the Caisse, but left the company to enter politics in 2013.

The Caisse manages funds for public and parapublic pension and insurance plans. It held $240.8 billion in net assets as of June 30.

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