Cinram says it's not for sale

DVD-maker Cinram International has rejected a call from aminority shareholder that it put itself on the auction block.

Hedge fund Amaranth Canada Trust, which owns 15.3 per cent of the units of the Cinram International Income Fund, issued a public demand on Monday thatCinramhire a financial adviser to explore the sale of the company.Amaranth saysthe market undervalues Cinram.

"The board [of Cinram] has no intention of selling, or exploring the possibility of selling, the fund or any of its operating subsidiaries or their respective businesses," saidCinram chair Henri Aboutboul in a statement.

Amaranth's call for a Cinram sale came hours after a related U.S. hedge fund, Amaranth Advisors, acknowledged that it lost billions making the wrong bet on natural gas prices.

Amaranth traders bet that gas prices would rise; instead, they fell to a two-year low last week.

Some analysts said investors sold Cinram, thinking thatAmaranth would haveto liquidate its $175-million stake in Cinram to raise money. The stock fell 83 cents to $22 on Monday in heavy volume.

"As you readily acknowledge in your letter, the selling pressure on the [Cinram] Fund's units that day was attributable to problems within the Amaranth organization, and was in no way caused by the fund, which remains on track with its business plans and progress," Aboutboul said.

Cinram units were down 30 cents to $21.70 in Tuesday afternoon trading on the TSX.