TORONTO — The $60-million acquisition of the Torstar Corp. newspaper group by NordStar Capital LP appears headed for approval this morning despite a last-minute revised rival proposal.
The owner of the Toronto Star and numerous other print and online publications says NordStar’s amended offer remains superior to the latest proposal from Canadian Modern Media Holdings Inc. because it could be completed quicker and is in the best interest of the company.
NordStar’s initial offer was worth $52 million or 63 cents per share when announced on May 27 but was increased 17.5 per cent to 74 cents per share after the rival group came forward with another proposal on July 10.
The rival group included investment banker Neil Selfe and two brothers, Tyler and Matthew Proud, who formed Canadian Modern Media Holdings Inc. to bid for Torstar.
It submitted a revised proposal Monday for 80 cents per share in cash, up from its initial bid for a combination 72 cents per share in cash and the issuance of one non-transferable contingent value right per share.
The CMMH proposal does not include any contingent value right as part of the consideration to holders of shares and doesn’t provide any information regarding proposed financing.
“We believe that CMMH’s submission of a proposal (Monday) is disingenuous and made for the purpose of confusing shareholders and obfuscating its own missteps. The terms of the voting support agreements entered into with the Torstar Voting Trust and Fairfax have been publicly disclosed and make it impossible for their proposal to be considered a superior proposal,” stated Torstar chairman John Honderich.
A special meeting of Torstar shareholders is scheduled to take place Tuesday morning to consider the proposal to acquire the company that has experienced years of declining revenue that accelerated during the pandemic.
TorStar says preliminary voting results indicate that more than 98 votes cast and more than 80 per cent of votes casts excluding those help by members of the Torstar voting trust and by Hamblin Watsa Investment Counsel Ltd., a wholly-owned subsidiary of Fairfax Financial Holdings Ltd., have endorsed the NordStar transaction
Because of the corporate structure of Torstar, any deal requires the support of five families that have controlled a voting trust since Toronto Star publisher Joseph Atkinson died in 1948.
Torstar said July 11 that the trustees would support NordStar’s amended offer.
This report by The Canadian Press was first published July 21, 2020.
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