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CanWestMARK BLINCH

New York investment bank Goldman Sachs is appealing a decision to allow Shaw Communications Inc. to take control of CanWest's broadcast assets, once the company has emerged from restructuring.

The Calgary-based cable giant won approval three weeks ago to invest a minimum of $95-million in exchange for 20 per cent of the equity and an 80-per-cent voting interest in a restructured CanWest. It knocked aside a competing bid put forward at the last minute by Goldman, in partnership with private equity firm Catalyst Capital Group, the Asper family and former executives of Rogers Communications Inc.

One member of that failed bid came out in support of Goldman's appeal on Wednesday. In a statement, Catalyst said its proposal with Goldman still stands.

"Catalyst strongly supports Goldman Sachs as it exercises its rights - both as a matter of law and a matter of fairness … Catalyst and Goldman Sachs remain committed to our proposal," the firm wrote.

CanWest's broadcasting division filed for court protection under the Companies' Creditors Arrangement Act in October; its newspaper division filed in January. The company owes almost $4-billion to its creditors.

Goldman still controls 65 per cent of a stable of specialty channels CanWest acquired from Alliance Atlantis in 2007. The firm has complained about being left out of the bidding, and in court documents on Wednesday called it "a remarkable abuse of the CCAA's process".

Madam Justice Sarah Pepall, who approved the Shaw deal in Ontario's Superior Court, struck back against this complaint last week when she released the reasons for her decision.

"There was nothing stopping [Catalyst or Goldman]from challenging the process at an earlier stage or alternatively, participating in it," she wrote. At an earlier stage, Catalyst had prepared a bid but refused to sign a non-disclosure agreement required to participate in the process.

The judge wrote that negotiating the three-year deal with Goldman is the next step in the process for Shaw.

Goldman's filing on Wednesday argued that the court "has fundamentally failed in its duty to ensure that CanWest and … its board of directors seek out and consider all reasonable alternatives for the restructuring of CanWest."

Goldman will now ask the court to reconsider its approval of the Shaw deal and consider other bids.

Leonard Asper, who was CEO of CanWest for more than a decade, stepped down on Thursday because of a conflict of interest stemming from the fact that he continued to work on an opposing bid.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 7:00pm EDT.

SymbolName% changeLast
GS-N
Goldman Sachs Group
+0.59%417.69
RCI-N
Rogers Communication
-0.49%41

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