08:20 AM EST, 12/02/2024 (MT Newswires) -- Quebecor Inc. (QBR-B.TO) could purchase Corus Entertainment Inc. (CJR-B.TO), CIBC Capital Markets said on Monday.

"With news reports that Corus is exploring a possible sale, we see Quebecor as one of the few potential buyers," analyst Stephanie Price said in a note to clients.

"Given Corus' distressed nature and the risk of the loss of additional programming rights, we expect that any deal would involve a significant discount to Corus' current debt levels and a very short payback (potentially with a guarantee that protects Corus' content distribution)," Price said.

The analyst said she assumes a deal value of $400 Million or less and a payback of four years or less.

"Using those metrics, we calculate that an acquisition would be slightly positive to Quebecor's leverage, moving from 3.36x currently to 3.2x," Price said.

"While we do not view a Corus acquisition as core to Quebecor's telecom strategy, we acknowledge that post the initial payback Quebecor would be able to utilize the approximately $70 Million of Corus' annual FCF for other priorities, including, potentially, network investment, dividend growth and share buybacks."