MONTREAL -- The Cirque du Soleil's shareholders terminated their takeover bid after the insolvent entertainment business reached an agreement with its creditors for an offer without any contribution from Quebec taxpayers.
The agreement will be presented Friday to the Superior Court of Quebec for approval to become the new so-called stalking horse bid for any rival offers that may be presented next month.
A lawyer representing Quebecor suggested last week that the media conglomerate intended to make a bid.
The shareholders -- the Texan fund TPG Capital, the Chinese firm Fosun and the Caisse de depot et placement du Quebec -- presented a US$420-million bid June 29 when Cirque filed for creditor protection. They were counting on a US$200-million loan from the Quebec government.
The shareholders and Cirque agreed to terminate the agreement, said a Cirque statement Thursday.
"The shareholder's proposed agreement, which had set the bar for other bids, assured a path to survival following the forced closure of all of the shows resulting from the COVID-19 pandemic by providing the company funding, support, and a clear road map to relaunch," said the statement.
The lenders, who hold about $1 billion of the Cirque's secured debt, would inject up to $375 million, create a fund to retain employees and pay ex-workers and artisans, and maintain the company's head office in Montreal, according to a source familiar with the matter, but who is not allowed to speak publicly.
"The co-operation of the group of creditors has been extraordinary in order to achieve our objective of recapitalizing the Cirque," Gabriel de Alba, the managing director and partner of Catalyst Capital Group, the main creditor, said in a statement.
Deprived of income since mid-March due to the COVID-19 pandemic, Cirque cancelled its 44 shows and cut nearly 3,500 people.
This report by The Canadian Press was first published July 16, 2020.
