Source : Globe & Mail

VANCOUVER -- By the time Leonard Asper strode into the ballroom of a Vancouver hotel this week to address the broadcasting industry's largest annual gathering, his arrival had been preceded by two days of talk about the future of his company, CanWest Global Communications Corp. There was the usual kind of casual chatter that takes place in hallways and bars when industry executives mingle. But at this year's Canadian Association of Broadcasters conference, the conversations had a common thread: a potential major move by CanWest. The talk ran the gamut from CanWest buying Alliance Atlantis Communications Inc., to the possibility of a merger with Rogers Communications Inc., or CanWest taking itself off the market with the help of a well-heeled private equity player.

"There's a lot of investment bankers running around with pitch books telling people that they should buy this or buy that," Mr. Asper said in an interview after the conference.

"If somebody takes a meeting [with an investment banker], all of a sudden there's a rumour out there that somebody is doing something," the chief executive officer said. In an industry that thrives on buzz, Mr. Asper's CanWest has become a lightning rod for speculation since the $1.4-billion takeover of CHUM Ltd. by Bell Globemedia in July.

While the CHUM deal still requires regulatory approval, it weighs heavily upon the industry. At the Vancouver conference, one panel was told to not to make direct references to the takeover in order to avoid sparking debate about the merits of the transaction. Instead, it was referred to as a "significant pending deal in the industry" or "the elephant in the room."

Mr. Asper said he feels no pressure to execute a deal in response to the one by his rivals at Bell Globemedia, parent company of The Globe and Mail. But in recent weeks, CanWest and Alliance have been the subject of much market speculation. Some of the most attractive assets in television right now are specialty channels and Alliance has several of them -- from Showcase to HGTV -- while CanWest is a relatively small player in that market.

"I've been on the record for years that conventional television and specialties are better off under one roof," Mr. Asper said. "I think everybody's looking at buying. I don't want to say what CanWest's intentions are, but we'd like to grow our business in Canada."

Analysts suggest the potential for an Alliance deal has ramped up in recent weeks, with the possible sale of CanWest's Australian TV assets, which would free up cash for an acquisition in Canada. Shedding the Australian network after foreign ownership rules there are loosened increases "the likelihood and urgency of a takeout of Alliance Atlantis," BMO Nesbitt Burns analyst Tim Casey wrote in a recent note.

As she made here way through the conference throngs this week, Alliance CEO Phyllis Yaffe shrugged off the talk, some of it going on nearby, if not within earshot.

Though Ms. Yaffe was never in the same room as Mr. Asper -- the two missed each other by a day -- they were often mentioned in the same breath by those musing about consolidation.

"Everyone wants to look smart," Ms. Yaffe said of the speculation. She added the company wouldn't comment on rumours.

Recent events have shifted the landscape for Mr. Asper. The government's decision to end the tax-advantaged status of income trusts in 2011 -- including CanWest MediaWorks Income Fund, which holds most of the company's newspapers -- has caused the value of that sector to crater.

Some trusts can now be picked up at a discount, which could prompt takeovers by rival companies, Mr. Asper believes.

In CanWest's case, the competing trusts are found on the newspaper side of its operations, with Osprey Media Income Fund in Ontario and FP Newspapers Income Fund, which owns the Winnipeg Free Press in CanWest's hometown. CanWest MediaWorks, Osprey and FP traded this week at or near at their 52-week lows.

"I think everybody who is in an income trust right now has got to be looking at those options: Are there other companies that got hit harder than they did? Or are there units so cheap now that it's worth them spending money on?" Mr. Asper said. "Maybe that's the best deal around. I think that you'll see more activity, whether it's buybacks or acquisitions."

Meanwhile, private equity players have been circling the media industry in the United States and Europe, a trend that could easily migrate north of the border if Canadian players such as Onex Corp. look to park their dollars in broadcasting or newspaper assets.

"I think there is so much money in the private equity world burning a hole in people's jeans that they probably are looking at every industry in Canada at this point," Mr. Asper said.

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