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Battle for control over Cirque du Soleil leads to deal with lenders
Monday, August 10

Battle for control over Cirque du Soleil leads to deal with lenders

Cirque du Soleil has accepted an offer to sell itself to its lenders in a deal that would kick its current private equity owner, TPG Capital, out of the tent, The Post has learned.

The bankrupt circus giant, known for dominating the box office in Las Vegas, OK’d the lenders’ offer in the middle of the night on Wednesday — marking the latest twist in a heated tug-of-war for control of the entertainment company, sources said.

The deal forgives roughly $800 million of Cirque’s $1.1 billion in outstanding loans in exchange for ownership, while leaving its current owners — a group led by billionaire private titans like David Bonderman — empty-handed.

The restructuring plan includes $375 million in new spending money, a $20 million fund to help out-of-work employees and contractors, and a vow to remain headquartered in Quebec, where Cirque got its start as a band of roving street performers in the 1980s.

Cirque is scheduled to present the new restructuring plan to a Quebec court on Friday. The judge is then expected to open the door to rival bidders who want to present superior offers, including TPG, a source close to the situation said.

The entertainment giant, known for theatrical and visually captivating acrobat acts, filed for bankruptcy protection in June after the coronavirus pandemic forced it to shutter its shows worldwide. It quickly agreed to sell itself back to its current owners, including TPG and the government of Quebec, in exchange for $400 million.

TPG’s restructuring plan angered the lenders, a group led by Los Angeles Dodgers co-owner Todd Boehly and private equity firm Catalyst Capital Group, because it offered them a minority stake in Cirque in exchange for wiping out their debt. They immediately protested and complained to the bankruptcy judge that they were never consulted.

As The Post exclusively reported earlier this month, the lenders were also gearing up to press the judge to oust Cirque’s longtime CEO Daniel Lamarre amid complaints that he and the rest of the board were blindly loyal to their current owners.

Then on July 1, Quebec Superior Court Judge Louis Gouin hinted that he would grill Cirque’s lawyers about the allegation that the company failed to obtain creditor approval for the TPG plan. The Cirque deal with creditors agrees to keep current Cirque management in place, sources said.

Cirque in a statement on Wednesday hinted that it switched to the lenders’ plan after they agreed to keep the company in Quebec and to help fund their artisan staffers and contractors.

Quebec’s government, which had offered $200 million toward the first restructuring plan, is not involved in the deal accepted on Wednesday, a source said. Nor is the company’s charismatic founder, Guy Laliberte, who — as The Post reported in June — lenders had explored wooing for their team.

“Catalyst and the creditor group are committed to respecting the Cirque’s history while aligning the company for a bright future.  Quebec’s bright artistic and innovative spirit will be central to our plans,” Gabriel de Alba of Catalyst Capital, a lead lender, said in a statement.