Cirque du Soleil founder Guy Laliberté may be ready to sell control of his company as it reaches a crossroads in its 30-year history.
Laliberté mused publicly in December about selling a 20- to 30-per-cent stake in the Montreal-based entertainment giant. In an interview with The Wall Street Journal, he said he was looking for a partner to help expand the business globally.
Now, there are suggestions that an even bigger block of the company could be up for grabs. La Presse reported this week that the Cirque — 90 per cent owned by Laliberté — is considering all its options, including the sale of majority ownership.
The Cirque and its adviser Goldman Sachs are seeking a deal that would value the company at about $2 billion, according to a Bloomberg News report, which identified private-equity firms TPG Capital Management and Carlyle Group LP as interested suitors. [ED: The Carlyle Group, one of the world’s largest investment firms, is listed on the New York Stock Exchange and achieved a significant money shot (200% in one year) as a shareholder of 50% of shares Beats Electronics last year. TPG Capital is a private investment firm managing assets of 65 billion, which has invested in the Uber transport service and the Fairmont hotel chains.]
If it happens, Quebec could see financial control of one of its flagship cultural enterprises slip out of the province. How long before we hear pleas from PQ leadership candidate Pierre-Karl Péladeau and others for the provincial government or public pension fund manager Caisse de dépôt et placement du Québec to step in to keep the Cirque in Quebec?
Well, that possibility has been dismissed by Economic Development Minister Jacques Daoust, who says a pricey government investment in the Cirque is out of the question.
He’s right. We know by now that the Cirque du Soleil, like Céline Dion, has decamped to Las Vegas and points abroad. Other than the people who work at the head office in Montreal, the Quebec flag is not all that visible on Laliberté’s business.
The real strength of the Cirque has been its ability to produce shows of artistic genius that resonate with audiences worldwide. Creative control is likely to remain here and, aside from any nationalist considerations, new capital and new ideas could be just what the Cirque needs at this point in its history.
The show has been running for three decades, but the business peaked just before the recession began in 2008. Signs of fatigue have been showing for a while. When the recession hit, the Cirque continued to expand its offering even as consumer demand slowed down.
In January 2012, it announced 400 layoffs. There were reports of another 52 job cuts last November.
Some shows have flopped, others have been shut down early or scaled back and management ranks have been rationalized. A tragic accident shook the Cirque in 2013 when an acrobat was killed after falling during a Las Vegas performance.
What might lie ahead under a new ownership group?
“They have smartly trimmed down the company to make it attractive to investors,” says Concordia University theatre professor Patrick Leroux. And the Cirque has moved its activities into separate divisions to give a clearer sense of the different markets in which it operates.
“But,” he asks, “have they kept their essential players, the people who actually drive the creative process without which the company is but a brand?
“Accountants and marketing staff have their roles, but they don’t reinvent the circus year in and year out. For that, you need a clear and driven artistic and business vision.”
Leroux says it’s difficult to know what will happen next. Depending on the potential partners’ core values, the Cirque might actually be poised for an interesting expansion with the infusion of new funds and ideas.
One possible partner identified in La Presse is Mitch Garber, chief executive of gaming company Caesars Acquisition Company, which owns resort and casino properties such as Planet Hollywood, Bally’s Las Vegas, The Cromwell Las Vegas, The Quad Las Vegas, Harrah’s New Orleans and the Horseshoe Casino in Baltimore.
Garber is reportedly interested in making a bid with private equity firm Apollo Management.
If there’s anyone who understands how Las Vegas works, it’s Garber. And if there are potential ties between the Cirque and the casino/entertainment industry, then Garber could be well placed to find them.
Attempts to reach him were unsuccessful. But he does fit the bill in one important respect. The company he runs is headquartered in Montreal and despite those Las Vegas connections, Garber is a Quebecer.
{ SOURCE: Montreal Gazette | http://goo.gl/GzB0y2 }
