by Sean Gordon and Eric Duhatschek , Breaking News from globeandmail.com

ABSTRACT

Brewing empire to take control of the illustrious franchise for the third time.

A deal in principle has been reached to sell the Montreal Canadiens to the Molson brewing family, which is about to take control of the illustrious franchise for the third time in its history.

Majority owner George N. Gillett confirmed in a statement issued by the team that he is relinquishing his 80.1 per cent share in the team.

"Our family has been very proud to be associated with the Montreal Canadiens over the past eight years and particularly to be a part of their centennial season. I am fully confident that the Molson brothers, who have been a great part of the heritage of the club, will ensure the preservation and development of this great sports institution, " said Gillett.

Sources told The Globe and Mail Gillett was torn over selling the club before agreeing to a deal.

Despite initial suggestions he would keep a token stake in the club, unnamed sources indicate Gillett has decided to walk away altogether.

Following in their grandfather's footsteps, Geoffrey, Justin and Andrew Molson - who are all in their late thirties and early forties - will be the new majority owners.

"This is a very exciting time for our family and we are grateful to the many people and organizations who came forward to offer their collaboration in the development of our proposal," Geoffrey Molson, a current Habs board member, Molson Coors executive and leader of the family bid, said in a statement.

The details of the agreement were not divulged, but according to sources with knowledge of the deal, the final purchase price will be somewhere in the neighbourhood of $540 million U.S.

It will be several weeks - and perhaps months - before the deal formally closes because of financing considerations and the due diligence required by the National Hockey League.

NHL commissioner Gary Bettman commented on the deal after addressing the National Hockey League Players' Association in Las Vegas on Saturday afternoon.

When asked about the Molson family agreeing to buy the Canadiens , Bettman said: "That's what I heard, subject to board approval."

When prodded further, Bettman said: "I think to the extent that they've been able to find people who are obviously passionate about the game and structure a transaction that makes sense for everybody, that's a real plus for the franchise and the fans in Montreal."

The deal means Gillett will walk away with a handsome profit - he bought the team for roughly $180 million in 2001 - which will presumably facilitate the renegotiation of loans involving British soccer club Liverpool F.C., which he co-owns with Texas-based partner Tom Hicks.

Gillett and Hicks have reportedly extended loans totaling nearly $600 million that were used to buy and fund the soccer club.

But the Habs sale is also believed to include roughly $265 million in arena debt and other liabilities, meaning Gillett's overall take will be in the area of $275 million.

And given that Gillett's concert promotion business and the Bell Centre are also part of the deal - the Gillett Entertainment Group reportedly has revenues of $100 million annually and the arena is one of North America's busiest - the actual value of the Hockey club falls considerably short of the overall price of the transaction.

Though the Molsons were up against Quebec corporate heavyweights like media giant Quebecor - backed by singer C line Dion, Quebec's public pension fund manager and the province's largest union-backed investment fund - and Claridge investment boss Stephen Bronfman, they have apparently triumphed without the benefit of loan guarantees or financial support from the province.

Quebec Finance Minister Raymond Bachand told Radio-Canada that the provincial government, which had volunteered to loan money to a local buyer, is not involved in the Molson bid.

Sources indicated the Molson consortium has financial backing from telecom heavyweight BCE, and a major Quebec-based financial institution.

The Molson group was one of three local bids for the team, another was lodged by Canadian-born investment fund principal W. Graeme Roustan, who is based in Florida.

It's expected the sale will shortly be rubber-stamped by the NHL's Board of Governors, which meets in Montreal on Wednesday ahead of the NHL draft - to be held at the Bell Centre on June 26-27.

It also appears that former Habs great Serge Savard, who pulled out of the bidding when the Molsons signaled their interest in May, will be brought back into the fold.

Savard, who now makes his living in commercial real estate and is known to be close to the Molsons, could return as team president or in another executive capacity, although he told radio station CKAC this afternoon that he will await the official announcement before commenting on his eventual role.

The Canadiens were first bought by the Molsons in 1957 when Sen. Hartland Molson and his brother Thomas, who is Andrew, Justin and Geoffrey's grandfather, took over the team.

They sold to another dynastic Montreal family in 1971 - the Bronfmans - but the family-owned brewery bought the team back in 1978 for $20-million U.S.

They then sold the team to Gillett in 2001, although Molson Coors, the family-owned brewery concern, continues to own 19.9 per cent of the team.

The Sports Business Journal reported that the total price of the impending will be between $506-million and $537-million U.S. - a princely sum for the club, the Bell Centre arena and Gillett's lucrative concert promoting business.

Some media reports in Montreal indicated the final amount could be $525-million U.S.

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