Why This Canadian Telecom Company Is Up 6%

Shares of Shaw Communications Inc SJR, a Canadian-based communications and media company, were trading higher by more than 6 percent on Wednesday.

Shaw announced earlier it reached an agreement with Corus Entertainment to sell its broadcasting subsidiary, Shaw Media Inc. for $2.65 billion.

Shaw Media's portfolio of channels include its core Global Television, and 19 specialty channels, including Food Network Canada, History Television and Showcase. As part of the agreement, the company will receive $1.85 billion in cash and $800 million worth of Corus Class B Non-Voting shares.

Shares of TSE-listed Corus Entertainment fell more than 5 percent following the announcement.

"This transaction represents a significant milestone for Shaw, firmly positioning the company as a leading pure-play connectivity provider with an attractive growth profile while allowing Shaw to participate in the significant upside potential resulting from the combination of Shaw Media and Corus," said Chief Executive Officer, Brad Shaw. "With the previously announced acquisition of WIND and sale of Shaw Media, Shaw will be focused on delivering consumer and small business broadband communications supported by its best-in-class wireline, WiFi and wireless infrastructure. In combination, these transactions will also enhance Shaw's growth profile, with approximately 25% of total revenue derived from growth services1."