Canada’s Corus Entertainment (TSE:CJR.B) has put itself up for sale as the company’s debt load surpasses C$1 billion (U.S.$720 million).
Toronto-based Corus Entertainment, which is known for producing television shows and children’s cartoons, has hired U.S. investment bank Jefferies Financial Group (JEF) to explore a sale of its business. The move comes after Corus warned that it might file for bankruptcy protection from its creditors, saying that its debt issues “cast significant doubt about the company’s ability to continue as a going concern.”
Corus recently restructured the terms of its loans with several creditors as it tries to stay afloat as its debt surpasses C$1 billion. The company is known for producing popular children’s cartoon series such as “Babar” and “Johnny Test,” as well as reality programs such as “Big Brother Canada.” The company also owns local TV and radio stations across Canada.
Decline in Traditional TV
Management at Corus has blamed the company’s financial struggles on a decline in revenue for traditional broadcast television and radio programs. The company has also cited impacts from the 2023 Hollywood writer and actor strikes that delayed production of many of its TV shows.
Until recently, Corus Entertainment also held the rights to specialty TV channels in Canada such as HGTV and the Food Network. In June of this year, Corus lost those rights to rival Rogers Communications (RCI), which takes control of them on Jan. 1, 2025.
Shortly after losing the specialty channel rights in June, Corus Entertainment’s CEO Doug Murphy announced he was leaving the company. CJR.B stock is down 84% this year.
Is Corus Entertainment Stock a Buy?
The stock of Corus Entertainment has a consensus Moderate Sell rating among three Wall Street analysts. That rating is based on one Hold and two Sell recommendations made in the last three months. The average CJR.B price target of C$0.13 implies 9% upside from current levels.