JUNE 27, 2023 (TORONTO) – In light of unusual trading activity, Nordstar Capital LP (“Nordstar”), owner of Metroland Media Group and the Toronto Star, and Postmedia Network Canada Corp. (“Postmedia”) today confirmed that they have entered into non-binding discussions to consider a combination of the Metroland newspapers and certain operational assets of the Toronto Star with Postmedia, through a potential merger transaction.
The merged entity, which is yet to be named, would be jointly owned and jointly controlled by Nordstar (which would have a 50% voting interest and 44% economic interest) and existing Postmedia shareholders (who would have a combined voting interest of 50% and a combined economic interest of 56%).
Jordan Bitove, Publisher of the Toronto Star and owner of Nordstar, would be Chairman of the merged entity and Andrew MacLeod, CEO of Postmedia, would be CEO.
The Toronto Star would maintain its editorial independence from the merged entity through the incorporation of a new company, Toronto Star Inc., which would manage the editorial operations of the Toronto Star. Nordstar would retain a 65% interest in Toronto Star Inc., and Jordan Bitove would remain Publisher of the Toronto Star.
“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. 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,” said Jordan Bitove, Publisher of the Toronto Star. “Preserving the editorial independence of our newsrooms, including the Toronto Star, is of particular importance to this arrangement going forward.”
“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. The proposed merged entity would provide the best opportunity to ensure strong news media coverage for Canadians from coast to coast,” said Andrew Macleod, President and Chief Executive Officer of Postmedia. “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 Mr. MacLeod.
The merger contemplates a significant reduction in overall debt through a conversion of a portion of the outstanding debt to equity, resulting in significant economic dilution to existing shareholders. This will result in an overall reduction in debt of the merged entity, providing it with stability to preserve and grow a strong editorial national infrastructure and maintain important brands.
The companies stress that the negotiation of this transaction is ongoing and is currently in the form of a non-binding Letter of Intent. There can be no assurance that definitive agreements will be entered into and on what terms. Any definitive agreement, if entered into, would be subject to a number of closing conditions and there are no assurances that such conditions will be satisfied or waived and the transaction will close.
The companies do not currently intend to disclose further developments with respect to the potential merger unless and until a transaction is entered into or negotiations otherwise conclude without a transaction being entered into.
About Nordstar Capital LP
Norstar Capital LP, the owner of Torstar Corporation (“Torstar”), is a diversified holding company owned by Jordan Bitove. In addition to Torstar, it has investments and voting interests in public entities such as VerticalScope Holding Inc., and indirect interests in NorthStar Gaming Inc., among other private investments.
About Torstar Corporation
Torstar is a holding company involved primarily in news and media businesses. The Torstar group includes the Toronto Star and Metroland Media Group, which has six award-winning 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. Other investments include Canadian Press and Metroland Parcel Services. The Toronto Star is the largest metropolitan daily newspaper in Canada, and the winner of more than 140 National Newspaper Awards. It is known for its investigative reporting, insightful opinion writing and comprehensive coverage of local, national and international news. It has also been making a difference in the lives of children for more than 100 years through the Toronto Star Fresh Air Fund and the Toronto Star Santa Claus Fund.