Torstar Corp. announced Tuesday it has entered into an agreement with an entity controlled by two prominent Toronto businessmen for them to acquire the entire news media company, including its flagship newspaper the Toronto Star.
Under the terms of the arrangement, NordStar Capital LP, which is controlled by Jordan Bitove and Paul Rivett, will acquire all of Torstar’s shares and take the company private.
Besides the Toronto Star, Torstar owns six other daily newspaper in Ontario including The Hamilton Spectator and Waterloo Region Record, some 70 community newspapers and numerous news sites and digital properties.
“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” John Honderich, chair of Torstar’s board of directors, said in a press release announcing the transaction.
“We hope the sale will benefit Torstar in the years ahead and believe that this is the beginning of an exciting new chapter for the company. We are delighted to know that the new owners have pledged to build on Torstar’s legacy of quality journalism and to promote the Atkinson Principles at the Toronto Star.”
Bitove and Rivett are both well known in Canadian business and civic-minded organizations.
Bitove played a major role in the start-up of the Toronto Raptors basketball team and Toronto’s bid for the 2008 Olympic Games. He is also on the board of directors of the SickKids Foundation.
Rivett recently retired as president of Fairfax Financial Holdings after 17 years with the Toronto-based global insurance and investment company.
Bitove said in a press release that “with this transaction we can ensure a future for world-class journalists and world-class journalism befitting the Star’s storied history.
“My family has always sought to contribute to the fabric of this country. Today’s announcement reflects those values and builds on that history. We are committed to investing in the news business, along with preserving the Atkinson Principles, as fairness and accuracy will continue to guide the papers’ prevailing value system. While the company’s business will become private, its focus will remain steadfastly public.”
The transaction, which is subject to approval by Torstar shareholders, is worth approximately $52 million.
Torstar said in a press release it believes the transaction offers shareholders a significant premium over its recent stock price. NordStar has offered 0.63 cents in cash for each Class A and Class B non-voting shares. The shares closed Tuesday at 0.40 cents.
The transaction has been approved by Torstar’s board of directors and has received the support of a significant majority of the Class A shareholders. Five families have controlled Torstar since 1957, including the Honderichs, Atkinsons, Hindmarshs, Campbells and Thalls.
(Toronto Star)
