Teachers' sells MLSE
February 03, 2012
It was early December and the news seemed to come out of nowhere: Teachers' was selling its stake in Maple Leaf Sports and Entertainment (MLSE)!
Our announcement generated unprecedented media attention and many inquiries. Once the deal officially closes in mid-2012, the sale of our ownership share to Bell and Rogers Communications Inc. will mark the end to one of Teachers' longest standing and most successful investments.
- Original investment in 1994 – $44 million
- Current ownership share – 79.53%
- Selling price – $1.32 billion
It began in 1994 as a $44-million acquisition of half of a depression-era building and a storied hockey team. It grew through a series of transactions to become a significant majority stake in a Canadian sports, entertainment, media and hospitality icon. Today, MLSE owns four teams, along with real estate and broadcast properties.
Jane Rowe, Senior Vice-President of Teachers' Private Capital, led the team that managed the sale process. We asked Jane to respond to a few of your most popular questions:
Pension News Online: Why did you want to sell the stake in MLSE?
Jane: It is important to distinguish between wanting to sell and exercising our fiduciary responsibility. While MLSE has been a great source of pride for us, our mandate is to invest the pension fund's assets in the best interests of the teachers of Ontario. As part of this mandate, we regularly assess all of our investments to see how they fit with our current and future needs.
The sale of MLSE was made with mixed emotions. On one hand, we are transferring our ownership to two solid partners who have the commitment and resources to ensure MLSE will continue to grow and prosper—it was important for us to be good stewards of this iconic asset. But at the same time, it also marks the end of a great association for Teachers'. We have enjoyed a wonderful 17-year history with MLSE and helped build a company that has few peers.
Pension News Online: Why did you change your mind about selling?
Jane: We were never compelled to sell MLSE and were confident in its value. We initiated an ownership review last March after the phone started ringing with a number of unsolicited expressions of interest from various parties. Working with our advisors, we approached the review with the same discipline we use around all of our investments.
At the end of November, having received no offers that met our requirements for sale, we concluded the process and announced we would retain our enhanced ownership position. We were happy to keep MLSE in our portfolio and started putting our plans in place to move the company forward.
Less than a week later, we were unexpectedly approached by Rogers and Bell with a new offer that was comprehensive, firm and met all of the terms and conditions that we considered necessary.
Pension News Online: How will you use the money raised by the sale of MLSE?
Jane: We won't receive anything until the deal closes later this year. Until then, we will be fully committed to the company's success and as always, continue to look ahead for future investment opportunities.