Teachers’ sells MLSE to Bell, Rogers

After months of speculation and in an unusual twist, the Ontario Teachers’ Pension Plan (Teachers’) has reached an agreement to sell its 79.53% ownership share in Maple Leaf Sports and Entertainment (MLSE) to two competing communications companies. Bell and Rogers Communications Inc. purchased Teachers’ interest for a combined total of $1.32 billion, based on an enterprise value of more than $2 billion.

Bell and Rogers will each pay Teachers’ about $533 million for a 37.5% chunk of the sports company, which owns the Toronto Maple Leafs, Toronto Raptors, Toronto FC, Toronto Marlies and Air Canada Centre.

Through his company Kilmer Sports, minority owner Toronto businessman Larry Tanenbaum will increase his current 20% stake in MLSE to 25%. Tanenbaum will continue to serve as chair of MLSE and as a governor of the NHL, the NBA and Major League Soccer.

The surprise deal came a few weeks after Teachers’ announced it had given up trying to sell the stake in the company, which it bought 17 years ago for $180 million. Shortly after that, Bell and Rogers stepped forward with a bid that met all of its original terms and conditions, Teachers’ said.

“MLSE is one of Teachers’ longest standing and most successful investments,” said Jane Rowe, senior vice-president, Teachers’ Private Capital. “We are proud of this iconic company, in which we first invested in 1994. It is second to none in the industry and has a very bright future. We believe that Bell and Rogers, with their MLSE partner Kilmer Sports, will deliver on the company’s potential.”

The transaction is expected to close in mid-2012.