NEWS
04/16/2015 14:26 EDT | Updated 06/16/2015 01:12 EDT

Cirque du Soleil preparing to announce sale on Monday, says source

MONTREAL - Emotions are said to be running high at Cirque du Soleil as the company reportedly prepares to announce the sale of the famed Quebec circus troupe on Monday even though co-founder Guy Laliberte has yet to fully signed off on the transaction, according to a former senior official.Employees are sad because an era in one of Quebec's creative success stories seems to be on the verge of change, said the person, who remains close to former colleagues."I'm very emotional because it's the end of something extraordinary," said the source, who didn't want to be identified by name.Laliberte told workers on Wednesday that he had not yet concluded a sale agreement, which reports say would be for something under $2 billion."To be perfectly honest, there are a lot of discussions taking place at the moment," Laliberte wrote in a short email. "However, and as I usually do, be sure that you will be the first informed if I conclude an agreement with new partners."Cirque du Soleil declined to comment or whether there would be an announcement on Monday.Reports suggest that U.S. private equity firm TPG Capital is close to completing a deal, along with Quebec pension fund manager the Caisse de depot and a large Chinese investment fund.Laliberte would continue to hold 10 per cent of the company after the sale and the Caisse another 10 per cent, with TPG holding 60 per cent and China's Fosun Capital the remaining 20 per cent.The new owners are expected to maintain the Cirque's headquarters in Montreal but could expand its global operations by opening a second production centre in Shanghai, where Fosun is based."We have to accept this reality that Asia is a growing market and Fosun, the second-largest investor. will try to attract people in China where you have a lot of very good artists," said Michel Nadeau, a former senior Caisse official.That could mean some staff reductions in Montreal, which faced a round of cuts two years ago when about 400 of the office's 1,800 employees were let go to improve the bottom line.However, he said the outlook for the headquarters is brighter than if Disney had been the buyer and relocated the operations to California.TPG is the world's largest casino owner with a stake in Caesar's Entertainment, while Fosun owns Club Med resorts.While the Quebec government has said it wants the Cirque's head office to remain in the province in the event of a sale, Premier Philippe Couillard said on Thursday in that the legislature that it won't intervene in "a private transaction."Nadeau said the Caisse wouldn't heed any political pressure and would only make an investment if it make financial sense.He said TPG, with $80 billion of assets under management in some 300 companies, is a very good manager."When you have these type of guys in the driver's seat, it's good for the Caisse," he said in an interview.The purchase price is reportedly less than what Laliberte was seeking. But after a 30-year run, it's natural for a billionaire entrepreneur to sell his company as the product matures, competition increases and the public reacts more slowly to the offering, said Nadeau, who now heads Quebec's Institute for Governance of Private and Public Organizations.He said Laliberte missed out on a bigger deal by not properly preparing his succession and keeping the company so closely tied to one person. That left him forced to sell to a majority owner, rather than take the company public.Follow @RossMarowits on Twitter