MONTREAL -- A takeover proposal from the Cirque du Soleil's secured creditors has been approved as the benchmark bid for a court-supervised auction of the insolvent entertainment company.
The creditor proposal replaces a shareholder offer as the so-called stalking horse bid, which establishes the minimum conditions to be met for potential rival bids.
The offer by a group of debt holders led by Toronto firm Catalyst Capital Group is valued at approximately US$1.2 billion, according to court-appointed monitor Ernst & Young.
Up to US$375 million will be made available to the Cirque whose operations have ground to a halt because of the COVID-19 pandemic, while two funds totalling US$20 million will be set up to pay money owed to former employees and artisans. The agreement also commits to maintain Cirque's head office in Montreal for at least five years.
Other bidders have until Aug. 18 to submit a fully funded offers that are at least US$1.5 million higher than the creditor bid, under a process overseen by the Quebec Superior Court.
Telecommunications conglomerate Quebecor Inc. says it is no longer interested in participating in the auction, while Cirque founder Guy Laliberte, who sold his stake in February, remains interested.
This report by The Canadian Press was first published July 17, 2020.
