Gillett Playing Monopoly With Canadiens Stock

by Robert L on Mar 23, 2009 11:42 PM EDT Comment 7 comments

A story published on Monday in the Quebec daily La Presse reports that Montreal Canadiens majority owner George Gillett might be considering a sale of the team in order to loosen the purse strings on his cash strapped global empire of acquisitions.

A statement issued by the Gillett family read that it has "retained the services of financial advisers in order to assess various strategic alternatives to optimize the value of its corporate assets. In Canada, the Gillett family has retained the services of BMO Capital Markets and the process is under way."

The news, jumped on by the Canadian Press, can be interpreted in many fashions. "Optimizing the value of its corporate assets" can include everything from the selling off of further shares in companies, to refinancing, to an outright sale. It is doubtful, but not improbable, that Gillett would wish to part with one of his best financial acquisitions.

Restricted by stiffling economic times, Gillett has basically hired BMO and three other financial analysis firms in North America and overseas to review his economic portfolio and inform him on where and what his properties are worth at present and in the immediate future.

The present worldwide financial climate is a wicked one. The circumstances which have lead to Gillett considering a sale of the team in the first place, are the same circumstances that could also prevent its potential sale.

Gillett, who apart from owning an 80.1 percent share in the Habs also own a 50 percent share in the Liverpool soccer club, a Nascar racing team, ski resort and gulf club holdings, and numerous other diversified holdings.

It is being speculated that Gillett brought upon the analysis of his companies due to July 24 scheduled repayment on a 630 million dollar loan with partner Tom Hicks on the Liverpool club.

Gillett bought the Canadiens in 2008 at a bargain price of 275 million dollars Canadian, and the club was recently valued at 334 million U.S. by Forbes magazine this past October. The previous October, Forbes established the Canadiens value at 283 million U.S. The Bell Centre (then named the Molson Centre) was built in 1996 at a cost of 270 million Canadian.

0 recs | Comment 7 comments |

Story-email Email Printer Print

Comments

This year and the Habs centennial

Would it not be perfect after all of this if Les Canadiens won the Cup ,lol

by Xtrahabsfan on Mar 24, 2009 1:40 AM EDT reply actions

Canadiens in massive debt too

We all know about the silly levels of debt Gillett runs in Liverpool, but he’s doing it in Montreal too. Much of his profits go to servicing his interest on debt. The value of the Canadiens would presumably be higher without this niggling concern ($240 million according to Forbes last autumn: http://www.forbes.com/lists/2008/31/nhl08_Montreal-Canadiens_314528.html – you can see the debt is 72% of the team’s value).

An Article I never published on October 30th was entitled: “Credit Crunch: Is the $240 Million Debt Going To be A Problem?”

One I did eventually put out dealt with it in part (here).

All that to say that we should not be surprised in the least by this development. With the stunning tail off of the Canadian dollar since, it appears that for Gillett at least it is. Nor do I think Gillett was a dream owner that we cannot afford to lose.

For me, if there is a concern, it lies with the league as a whole. If the Canadiens can struggle, so can many teams that were teetering long before les Glorieux.

by Topham on Mar 24, 2009 7:02 AM EDT reply actions

Very interesting data concerning the debt ratio and the massive amount of debts under the Canadiens.

I have a few questions you might be able to answer… Are the debts ‘property’ of the Club the Hockey Canadiens? Or are they Gillett’s debts, taken with the CH as guarantee?
Meaning, in the event where the team is sold, would the new owner ‘purchase’ those debts as well or would he be getting just the assets?

by Habs on Mar 24, 2009 10:38 AM EDT up reply actions

Don't care

Don’t want an American running(or owning) the Habs anyway. I don’t mind foreign players. But management/ownership is different.

Mourning Guy Carbonneau...
Royals obscure player to watch in ST: Lenny DiNardo

by playingwithfire on Mar 24, 2009 10:47 PM EDT reply actions

I’ve read the entire history of the team several times over, and my feeling are the exact opposite. Through the course of 100 years, the most level headed owners, managers and coaches have primarily been the non french who served those roles. Whenever locals have been involved, rash decisions were often made that hampered the team long term. Having someone with an emotional detachment to the local fevers isn’t always a bad thing. So far, Gillett has been a perfect owner, never medling and allowing the hockey heads to do their work with as much cash at their disposal as possible.

by Robert L on Mar 25, 2009 8:10 AM EDT reply actions