An Ontario judge has approved the privatization of Torstar Corp. by a group led by former Fairfax Financial Holdings Ltd. President Paul Rivett, but a rival bidder indicated it isn’t giving up its fight to take over the 128-year-old newspaper chain.
Justice Cory Gilmore, who presided over a hearing last week to determine if the sale to NordStar Capital LP was conducted in a “fair and reasonable manner” despite calls from aggrieved Torstar shareholders arguing otherwise, approved the sale, according to filings obtained by BNN Bloomberg late Monday.
NordStar, a group led by Rivett, businessman Jordan Bitove and former Ontario premier David Peterson, offered 74 cents per share for Torstar. That offer was overwhelmingly approved by the company’s shareholders. However, a competing bid from Canadian Modern Media Holdings Inc. (CMMH), a firm led by Avesdo Chief Executive Officer Tyler Proud offered 80 cents per share for the company last week. That offer was rejected by Torstar’s board amid questions about the financing.
“Our deal is supported by 98 per cent of the entire shareholder group and 81 per cent of the minority shareholders. [Monday’s] judgement by Justice Gilmore confirms what we’ve known all along – that our deal is fair and reasonable. We now look forward to refocusing on the task at hand,” Bitove said in an emailed statement.
Do you think Torstar’s board secured the best deal for its shareholders?
Total Results: 0
Some shareholders argued that the CMMH bid was never fully considered by Torstar’s board. As well, lawyers representing the CMMH group argued that a sealed affidavit signed by Infor Financial Group Inc. CEO Neil Selfe, one of the group’s backers, should be unredacted because it could show how negotiations between the two parties resulted in an unfair outcome for shareholders.
With NordStar now given the green light to acquire Torstar, the deal is expected to close shortly. Previous statements from Torstar suggested that an approved deal could close in about a week.
However, in a statement after Gilmore’s judgment was released Monday, CMMH made it clear that it isn’t giving up hope.
“CMMH continues to believe that the proposed transaction as contemplated by the plan at $0.74 per share, is neither fair nor reasonable. As such, CMMH expects to immediately commence an appeal of today’s decision and will seek a stay of Justice Gilmore’s decision, preventing the closing of the plan, pending the determination of the appeal.”
Torstar chair John Honderich declined to comment on the court’s decision when reached by BNN Bloomberg.
“The other side is launching an appeal, so I will not be making public statements,” he said in an email.
If the Nordstar deal overcomes CMMH’s last-ditch attempt, it would mark the end of an era for the owner of one of Canada’s largest newspapers, The Toronto Star. The company has been controlled by a voting trust of several Toronto families for decades, but its balance sheet has suffered from steady revenue declines caused by a plunge in advertising sales and circulation.
With files from Iva Poshnjari
Source:bnn
