Marwyn Investment Management LLP

August 11, 2006 11:02 ET

Marwyn Announces Intention to Acquire Movie Distribution Business from Alliance Atlantis and Movie Distribution Income Fund

LONDON, UNITED KINGDOM--(CCNMatthews - Aug. 11, 2006) -

ATTENTION: BUSINESS MEDIA

Marwyn Investment Management LLP ("Marwyn") today announces its intention to work with Alliance Atlantis Communications Inc. (TSX:AAC.B)(TSX:AAC.A) and Movie Distribution Income Fund (TSX:FLM.UN) on a potential offer to acquire the motion picture distribution business owned by them through Motion Picture Distribution LP. The offer would be made by Aldgate Capital Plc, a company listed on the UK Alternative Investment Market (AIM) of the London Stock Exchange.

Marwyn indicated that Aldgate is prepared to pay aggregate cash consideration for the business of between $394 million and $414 million, resulting in proceeds to the Fund in the range of $10.00 to $10.50 per unit, which at the upper end of the range would represent a premium of approximately $4.78 or 85% over the volume weighted-average trading price of the units of the Fund on the TSX for the 10 days preceding the date of this announcement of $5.72 per unit. Based on these amounts, aggregate proceeds to Alliance Atlantis would be between $201 million and $211 million. In addition to the cash proposal, the acquiror would be prepared to offer a partial share alternative should Alliance Atlantis seek to retain a continuing interest in the company going forward.

Aldgate Capital Plc would ultimately be controlled by Canadian management, whom Marwyn expects to be the former executive managers of the business.

The acquisition would be funded through a combination of debt and equity, the latter of which would take the form of an offering of shares in the AIM-listed company to be subscribed for by Marwyn and supporting institutional investment funds. The acquisition would be structured with the intention of ensuring that no foreign investor can exercise control of the business, therefore ensuring the business remains under Canadian control, but with access to international capital markets.

Marwyn has a very high regard for the management of both companies and is committed to working constructively with Alliance Atlantis and the Fund to structure a transaction that caters to the needs of all stakeholders.

Completion of any transaction will be subject to a number of conditions, including the obtaining of all necessary regulatory approvals, completion of due diligence including the entering into of satisfactory arrangements with senior management and the entering into or confirmation of arrangements relating to access and output contracts and other commercial agreements between Alliance Atlantis and Motion Picture Distribution LP.

Marwyn seeks to engage in further discussions with current management of Alliance Atlantis and the Fund as soon as possible in order to negotiate the terms of an acceptable transaction.

Citigroup is acting as financial adviser to Marwyn Investment Management.

About Marwyn Investment Management LLP

Marwyn Investment Management LLP ("Marwyn"), is a London based hedge fund investor specialising in establishing and investing in experienced management teams with buyout and consolidation strategies through public and private special purpose acquisition platforms and is backed by some of the world's leading investment institutions including Och Ziff, GLG, Schroders, Fidelity, Canada Life, GAM and Cycladic. The Marwyn team have carried out over C$1.3 billion in acquisitions since September 2004 in sectors including environmental services, insurance, leisure, gaming and food.

Contact Information

  • Finsbury
    Faeth Birch/Don Hunter
    +44 (0)20 7251 3801