Performance Sports Draws Interest From Watsa’s Fairfax, Sagard

  • Talks over restructuring, debt, ‘strategic alternatives’
  • No agreement, term sheet signed; no guarantee deal will happen

Fairfax Financial Holdings Ltd. and a unit of Power Corp. of Canada are considering various proposals related to Performance Sports Group Ltd. including a restructuring, refinancing, buying the company’s debt or other “strategic alternatives.”

Sagard, Performance Sports’ largest shareholder, and Fairfax have signed a confidentiality pact and will continue talks with the company’s management and other co-investors, Sagard said in a press release Monday. Sagard is the closely held New York-based investment firm run by Paul Desmarais III of Power Corp.

Sagard and Fairfax, led by Chief Executive Officer Prem Watsa, haven’t entered into any agreements, term sheets, or other arrangements and there’s no guaranty a deal will happen, Sagard said. The U.S. firm holds 17 percent of Performance Sports shares while Toronto-based Fairfax holds no interest in the company, according to data compiled by Bloomberg.

Brookfield Asset Management Inc., Canada’s largest alternative-asset manager, has also looked at the sports firm, the owner of the Bauer and Easton brands. According to people familiar with the matter, Brookfield was set to submit a formal takeover bid. Brookfield is the second-largest shareholder of the Exeter, New Hampshire-based firm after Sagard Capital.

Performance Sports has dipped 59 percent this year following an investigation into the company by U.S. and Canadian securities regulators. The company also delayed reporting its earnings amid an internal investigation.

In August, the company said it hired Centerview Partners to advise on a strategic review. It also said it had agreed to an extension with its lenders through Oct. 28 to file its earnings under current credit agreements.

The shares were unchanged at C$3.98 at 10:17 a.m. in New York.

— With assistance by Scott Deveau

    Before it's here, it's on the Bloomberg Terminal.