Vancouver: Burnaby, b.c.-based TSC Shannock Corp. – one of Canada’s largest home video distribution companies – has agreed to sell all of its Class a shares to competitor Video One, a wholly owned subsidiary of Standard Broadcasting.

The $3.9-million deal – which requires shareholder approval – will see Video One pay $1.10 per outstanding Class a share.

Video One is paying a 37.5% premium based on recent share prices for Shannock on the Toronto Stock Exchange. To be successful, two-thirds of the Class a shares have to be tendered to Video One, which intends to secure 100% of all Class a shares over the long term. Shannock principals William McCartney, Uwe Schnack, Trudy Dalinger and William Bouvette hold an aggregate 28.1% of the Class a shares.

The deal with Video One, announced Sept. 18, follows closely on the failed amalgamation deal with Toronto-based Cambium Entertainment Group. The deadline for completing the Cambium deal elapsed Aug. 31 because the proposed private placement was not secured.

For the year ending May 31, 1998, Shannock’s sales were $80.9 million, down 9.8%, from the previous fiscal year. Net losses for fiscal 1998 were $748,000 compared to net profits of $35,000 in 1997.

Decreased sales were caused by increasing competition and a greater number of studios going direct to large video retail chains, says the company in its annual report released Sept. 17. Shannock states there were fewer releases from the studios in 1998.

Also contributing to the loss in 1998 was the discontinuation of Trax Music Vision, a wholly owned retail division.

Video One has 12 rental and sell-through branches across the country, while Shannock has eight distribution and sales centers across Canada.