Postmedia, Toronto Star owner in merger talks
Author of the article
ostmedia News
Published Jun 27, 2023 • Last updated 1 day ago • 3 minute read
Two of Canada’s largest media companies — Postmedia, owner of the Toronto Sun and a large fleet of major Canadian newspapers, and Nordstar, owner of the Toronto Star and other city and weekly newspapers — are in talks for a potential merger.
The two media giants have entered into non-binding discussions on options for combining operational assets, according to company officials.
The information was released in response to unusual trading activity, said Phyllise Gelfand, vice-president of communications for Postmedia, in a written statement released late Tuesday afternoon.
The merged company, which would be jointly owned and jointly controlled by Nordstar and existing Postmedia shareholders, has not yet been named. Each side of the transaction would have a 50% voting interest. Postmedia would have a 56% economic interest in the new corporate entity and Nordstar the remaining 44% economic interest.
The two companies’ top executives would remain in positions of authority in the new merged company: Jordan Bitove, publisher of the Toronto Star and owner of Nordstar, would be chairman and Andrew MacLeod, chief executive of Postmedia, would be CEO.
“The core rationale for the proposed merger is to create a new entity with reduced debt, national digital scale to compete with the global technology giants and economies of scale in the business model,” said MacLeod.
“The proposed merged entity would provide the best opportunity to ensure strong news media coverage for Canadians from coast to coast. The news media industry in Canada and around the world is under existential threat, new models are urgently required. Scale, reach and efficiency are all prerequisites for future success and to compete with the global technology platforms. Canadians deserve and expect world-class journalism from trusted sources, and we are committed to preserving the editorial independence of all our newsrooms,” added MacLeod.
The Toronto Star would also maintain its editorial independence from the merged entity with Nordstar retaining a 65% interest in a new entity, Toronto Star Inc., which would manage editorial operations of the Star. Bitove remains publisher of the Toronto daily.
“The viability of the newspaper industry in Canada is at an extreme risk, especially in the small towns and communities that are important to this nation,” said Bitove.
“By pooling resources and working collaboratively, we can ensure that more Canadians have access to trusted journalism and quality reporting. This will strengthen our democracy and protect the fabric of our country. Preserving the editorial independence of our newsrooms, including the Toronto Star, is of particular importance to this arrangement going forward.”
Postmedia Network Canada Corp. is a holding company with more than 130 brands across print, online and mobile platforms, including the Vancouver Sun and The Province in Vancouver, the Calgary Herald and Edmonton Journal, the Sun tabloids, Montreal Gazette, Ottawa Citizen, Windsor Star and London Free Press.
Nordstar owns the Toronto Star and Metroland Media Group, which has six daily newspapers in Ontario, including the Hamilton Spectator, Waterloo Region Record, Niagara dailies and Peterborough Examiner, as well as more than 60 community news outlets.
In 2020, Torstar accepted a $60-million takeover offer from NordStar Capital LP that was financed by Canso Investment Counsel Ltd., which is a major debtholder of Postmedia, a deal approved by Canada’s Competition Bureau.
NordStar was formed by Bitove and then-partner Paul Rivett to buy Torstar assets in 2020 for $60 million. After a rocky relationship and a public dispute over direction, the two split, leaving Bitove in control of NordStar and Torstar’s media properties.
In 2017, Postmedia, Torstar and a Torstar subsidiary, Metroland Media Group, struck a deal to swap 41 community and small daily newspapers. The subsequent closure of many of the titles drew public complaints and the attention of the Competition Bureau. After an investigation, the bureau declined to take further action.
Both companies have faced economic hardship during increasing digitalization of news, which has meant cuts, layoffs and cost reductions.
Negotiations for the media mega-deal are ongoing and the merger is not a done deal, company officials said.
The status of the arrangements is outlined in the form of a non-binding “letter of intent” that comes with no assurance of a completed or definitive agreement.
Officials also said an agreement would be subject to closing conditions that may or may not be satisfied.
Postmedia said it would not immediately be releasing additional information on the potential merger.
torontosun.com
Author of the article
ostmedia NewsPublished Jun 27, 2023 • Last updated 1 day ago • 3 minute read
Two of Canada’s largest media companies — Postmedia, owner of the Toronto Sun and a large fleet of major Canadian newspapers, and Nordstar, owner of the Toronto Star and other city and weekly newspapers — are in talks for a potential merger.
The two media giants have entered into non-binding discussions on options for combining operational assets, according to company officials.
The information was released in response to unusual trading activity, said Phyllise Gelfand, vice-president of communications for Postmedia, in a written statement released late Tuesday afternoon.
The merged company, which would be jointly owned and jointly controlled by Nordstar and existing Postmedia shareholders, has not yet been named. Each side of the transaction would have a 50% voting interest. Postmedia would have a 56% economic interest in the new corporate entity and Nordstar the remaining 44% economic interest.
The two companies’ top executives would remain in positions of authority in the new merged company: Jordan Bitove, publisher of the Toronto Star and owner of Nordstar, would be chairman and Andrew MacLeod, chief executive of Postmedia, would be CEO.
“The core rationale for the proposed merger is to create a new entity with reduced debt, national digital scale to compete with the global technology giants and economies of scale in the business model,” said MacLeod.
“The proposed merged entity would provide the best opportunity to ensure strong news media coverage for Canadians from coast to coast. The news media industry in Canada and around the world is under existential threat, new models are urgently required. Scale, reach and efficiency are all prerequisites for future success and to compete with the global technology platforms. Canadians deserve and expect world-class journalism from trusted sources, and we are committed to preserving the editorial independence of all our newsrooms,” added MacLeod.
The Toronto Star would also maintain its editorial independence from the merged entity with Nordstar retaining a 65% interest in a new entity, Toronto Star Inc., which would manage editorial operations of the Star. Bitove remains publisher of the Toronto daily.
“The viability of the newspaper industry in Canada is at an extreme risk, especially in the small towns and communities that are important to this nation,” said Bitove.
“By pooling resources and working collaboratively, we can ensure that more Canadians have access to trusted journalism and quality reporting. This will strengthen our democracy and protect the fabric of our country. Preserving the editorial independence of our newsrooms, including the Toronto Star, is of particular importance to this arrangement going forward.”
Postmedia Network Canada Corp. is a holding company with more than 130 brands across print, online and mobile platforms, including the Vancouver Sun and The Province in Vancouver, the Calgary Herald and Edmonton Journal, the Sun tabloids, Montreal Gazette, Ottawa Citizen, Windsor Star and London Free Press.
Nordstar owns the Toronto Star and Metroland Media Group, which has six daily newspapers in Ontario, including the Hamilton Spectator, Waterloo Region Record, Niagara dailies and Peterborough Examiner, as well as more than 60 community news outlets.
In 2020, Torstar accepted a $60-million takeover offer from NordStar Capital LP that was financed by Canso Investment Counsel Ltd., which is a major debtholder of Postmedia, a deal approved by Canada’s Competition Bureau.
NordStar was formed by Bitove and then-partner Paul Rivett to buy Torstar assets in 2020 for $60 million. After a rocky relationship and a public dispute over direction, the two split, leaving Bitove in control of NordStar and Torstar’s media properties.
In 2017, Postmedia, Torstar and a Torstar subsidiary, Metroland Media Group, struck a deal to swap 41 community and small daily newspapers. The subsequent closure of many of the titles drew public complaints and the attention of the Competition Bureau. After an investigation, the bureau declined to take further action.
Both companies have faced economic hardship during increasing digitalization of news, which has meant cuts, layoffs and cost reductions.
Negotiations for the media mega-deal are ongoing and the merger is not a done deal, company officials said.
The status of the arrangements is outlined in the form of a non-binding “letter of intent” that comes with no assurance of a completed or definitive agreement.
Officials also said an agreement would be subject to closing conditions that may or may not be satisfied.
Postmedia said it would not immediately be releasing additional information on the potential merger.
Postmedia, Toronto Star owner in merger talks
The two media giants have entered into non-binding discussions on options for combining operational assets, according to company officials.
