Montreal: Cinar Corporation president and co-ceo Ron Weinberg and vp and cfo Hasanain Panju are in the midst of a u.s., Canada, European road show as the company returns to the market with a new issue of seven million limited voting shares. Of the total, 6.5 million is from treasury and 500,000 from the company’s principal shareholders, including chairman Micheline Charest and Weinberg.

Stock prices quoted in the Feb. 12 preliminary prospectus are us$22 on the Nasdaq National Market, $33 on the Montreal Exchange and $32.50 on the Toronto Stock Exchange.

The sales price for the new limited shares will reflect market prices – specifically, the Nasdaq price – on the closing day of the offering, expected to be in the first half of March. Net proceeds to Cinar are projected at the $200 million range, and just over $233 million if an additional 1,050,000 share over-allotment option is fully exercised by the underwriters.

The company says it will use the proceeds to repay us$20 million in bank loans, close to us$40 million for the acquisition of multimedia educational producer EduSoft and for working capital to finance property acquisitions and program development, production and distribution for both its entertainment and educational segments.

ING Baring Furman Selz llc is the lead manager. The co-managers are BT Alex. Brown, Salomon Smith Barney, Griffiths McBurney & Partners and CIBC Oppenheimer.

The Cinar road show opened in Baltimore Feb. 17, with two-city-a-day stopovers in New York, London, Eng. (where the company has an operation and shareholders), in Montreal and Toronto on Monday, Feb. 22, and on to Chicago, Milwaukee, Denver, Houston, San Francisco, San Diego and Los Angeles.

Together, Charest and Weinberg will control 62.3% of Cinar’s voting shares following the new offering.

Expanded role on Scarry

In other business news, The Jim Henson Company has filed a complaint in the u.s. District Court for the Southern District of New York against Cinar, alleging the preschool puppet series Wimzie’s House represents ‘unfair competition and copyright infringement’ of The Muppets.

Cinar also reports ‘a new alliance’ with Viacom Consumer Products, the licensing division of Paramount Pictures, will expand the company’s role beyond producer of the successful animated series The Busy World of Richard Scarry to include responsibility for entertainment and educational categories including programming, home video and music and the development of a new tv series.

Previously, Cinar did not participate in the licensing and merchandising rights associated with the Richard Scarry property. ‘[The deal] basically continues our strategy of expanding our ownership of rights of titles that we produce,’ says Panju.

The expanded licensing deal includes educational publishing material, and Panju says Cinar also has some share of the Simon & Schuster book publishing activity.

Cinar also announced it has acquired a film library produced, owned and licensed to third parties by Leucadia Film Corp. of Salt Lake City, Utah.

The acquisition, for about $3.5 million, adds 12 feature-length movie titles (the equivalent of 36 half-hours) of family programming to Cinar’s growing family film library. Leucadia titles have been sold to broadcasters in over 75 countries including the Disney Channel, Home Box Office and Showtime.

Lawsuit ‘without merit’

In an interview from North Carolina, Weinberg told Playback he feels the legal suit against Wimzie’s House by Henson is without merit.

In development terms, Wimzie’s House started out more than five years ago as a shared project between Radio-Canada’s youth department, Tele-Quebec and Cinar.

Weinberg says the character traits associated with the Wimzie cast are original. ‘What we’ve created here are individual characters that represent, in the case of Wimzie, a five-year-old girl who has a specific personality and behaves a certain way and talks a certain way which is totally unique and original.

‘We were surprised, given the show has been on pbs and throughout the country for well over a year and a half now, that the week of the New York Toy Fair we get hit with this complaint,’ he says.

Wimzie has been licensed by Eden Toys, named in the complaint, Learning Curve International, Sony Wonder for home video and audio rights, Simon & Schuster for interactive products, and for new lines in schools and daycares by Carson-Dellosa Publishing and HighReach Learning, respectively.