The Ontario Teachers' Pension Plan is close to reaching a deal with TD Capital Group that would increase its stake in Maple Leafs Sports and Entertainment (MLSE). The purpose of the deal is to make MLSE more attractive to suitors.
Maple Leafs Sports and Entertainment Ltd. is one of the richest organizations in the city’s sports and entertainment sectors. The organization owns the Toronto Maple Leafs, the Toronto Raptors, Toronto Marlies, Toronto FC, Toronto Marlies, the Air Canada Centre and other sports teams and assets.
According to 680 News, the Ontario Teachers’ Pension Plan is in serious discussions to purchase TD Capital Group’s stake in MLSE, which would be a little more than 13 percent and increase the pension plan’s stake to nearly 80 percent – right now they own 66 percent.
The Canadian Press reports that the two sides have reached a deal on principal financial terms, but nothing has been noted to the public.
The goal of the pension plan is to make MLSE easier to sell and to make it more appealing to future buyers. It is estimated that the operator could be worth between $1.5 billion and $2.5 billion due to the NHL team’s net worth of $505 million.
“When we first bought it, it was an arena a block from here, and it had a team, one hockey team,” said Teachers' president and chief executive Jim Leech during the Bloomberg Economic Summit in Toronto, reports Bloomberg News.
“Today it’s a large organization with four professional sports teams, several different venues, large entertainment holdings, the third-largest concert venue in North America. We built that up. And we’ll see now if we’ve created sufficient value that it’s time to turn it over to somebody else.”
The Toronto Star notes that the pension plan, which maintains $107.5 billion in assets and administers 295,000 pensions for both active and retired Ontario teachers, has hired Morgan Stanley to assist in the sale of its stake.
At the present time, there are four key potential investors; Bell, Rogers, Shaw and Telus.
TD became one of the first investors in MLSE and Maple Leaf Gardens back in 1994 and has searched for the right time, the right terms and the right buyers for several years. “It made money on its original investment and has wanted to get out for some time,” said one TD insider.