MONOPOLY CAPITALI$M
Canada's Postmedia Network confirms merger talks with Nordstar Capital
Reuters
Tue, June 27, 2023
(Reuters) - Postmedia Network Canada Corp on Tuesday confirmed it was in a non-binding discussion with Nordstar Capital for a potential merger with some operational assets of the Toronto Star and the Metroland newspapers.
The merger will help to significantly reduce overall debt and to grow a strong national editorial infrastructure, the company said.
Nordstar Capital LP will have a 50% voting interest and 44% economic interest in the merged entity, which is yet to be named, while Postmedia shareholders will hold the rest.
Jordan Bitove, owner of Nordstar, will be the chairman of the combined entity and Andrew MacLeod, CEO of Postmedia, the CEO.
The Toronto Star will maintain its editorial independence through the incorporation of a new company, Toronto Star Inc, the company said.
Nordstar would retain a 65% interest in Toronto Star Inc, and Bitove would remain publisher of the Toronto Star.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Sriraj Kalluvila)
Reuters
Tue, June 27, 2023
(Reuters) - Postmedia Network Canada Corp on Tuesday confirmed it was in a non-binding discussion with Nordstar Capital for a potential merger with some operational assets of the Toronto Star and the Metroland newspapers.
The merger will help to significantly reduce overall debt and to grow a strong national editorial infrastructure, the company said.
Nordstar Capital LP will have a 50% voting interest and 44% economic interest in the merged entity, which is yet to be named, while Postmedia shareholders will hold the rest.
Jordan Bitove, owner of Nordstar, will be the chairman of the combined entity and Andrew MacLeod, CEO of Postmedia, the CEO.
The Toronto Star will maintain its editorial independence through the incorporation of a new company, Toronto Star Inc, the company said.
Nordstar would retain a 65% interest in Toronto Star Inc, and Bitove would remain publisher of the Toronto Star.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Sriraj Kalluvila)
Postmedia in merger talks with Toronto Star owner Nordstar
The Canadian Press
Tue, June 27, 2023
TORONTO — Postmedia Network Canada Corp. said Tuesday that it's in talks to merge with Nordstar Capital LP, the owner of Metroland Media Group and the Toronto Star.
The two publishers say the proposed deal, which is yet to be finalized, is a bid to create greater scale so they can respond to the "existential threat" facing the media industry.
“The viability of the newspaper industry in Canada is at an extreme risk," said Jordan Bitove, publisher of the Toronto Star, in the news release.
Postmedia said discussions to consider a combination are so far non-binding, but that the proposed merger would see an even division of voting rights. Postmedia shareholders would hold a 56 per cent economic interest and Nordstar would hold a 44 per cent interest. Nordstar would retain a 65 per cent interest in Toronto Star Inc.
Bitove, owner of Nordstar, would be chairman of the merged entity and Andrew MacLeod, chief executive of Postmedia, would be CEO.
Postmedia, which owns publications including the National Post, Vancouver Sun and Calgary Herald, said the proposal would see the Toronto Star maintain editorial independence through the incorporation of a new company that would manage its editorial operations.
It says the deal would involve converting some of its outstanding debt to equity, resulting in "significant economic dilution" to existing shareholders, while reducing the overall debt of the merged entity.
"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 in the release.
"The proposed merged entity would provide the best opportunity to ensure strong news media coverage for Canadians from coast to coast."
While many of the details are yet to be confirmed, it's not clear that the deal would lead to better coverage, said Christopher Waddell, professor emeritus at the School of Journalism and Communication at Carleton University.
“It’s not clear to me ... how this accomplishes what they’re saying they’re going to accomplish in being able to invest more money and produce a strong news media coverage for Canadians.”
He said the pace of contraction among news organizations has been accelerating amid declining ad revenues and audience numbers, and that this deal looks to be the result.
“There’s more than a little bit of desperation.”
Postmedia has been struggling financially for years, saddled with extensive debt. It reported a net loss of $20.8 million in its latest quarterly results, while in its last full fiscal year it paid $31 million in interest expenses while carrying about $275 million in debt.
The company announced significant layoffs in January this year, with around 11 per cent of editorial staff to be affected. In recent years, Postmedia has closed a number of small-town newspapers, reduced print production of some of its titles, and moved some to digital-only formats to manage costs, among other layoffs and buyout offers.
Last week, Jamie Irving resigned as executive chair of the media conglomerate's board. He had held the role for less than seven months after assuming the role when longtime Postmedia chairman Paul Godfrey stepped down.
Postmedia said it confirmed the discussions in light of unusual trading activity, which saw its share price climb by more than 50 per cent on the day.
This report by The Canadian Press was first published June 27, 2023.
———
Torstar holds an investment in The Canadian Press as part of a joint agreement with subsidiaries of The Globe and Mail and Montreal’s La Presse.
Companies in this story: (TSX:PNC.B)
The Canadian Press
Newspaper Chains in Canada Plot Merger, Debt Swap to Stay AfloatThe Canadian Press
Tue, June 27, 2023
TORONTO — Postmedia Network Canada Corp. said Tuesday that it's in talks to merge with Nordstar Capital LP, the owner of Metroland Media Group and the Toronto Star.
The two publishers say the proposed deal, which is yet to be finalized, is a bid to create greater scale so they can respond to the "existential threat" facing the media industry.
“The viability of the newspaper industry in Canada is at an extreme risk," said Jordan Bitove, publisher of the Toronto Star, in the news release.
Postmedia said discussions to consider a combination are so far non-binding, but that the proposed merger would see an even division of voting rights. Postmedia shareholders would hold a 56 per cent economic interest and Nordstar would hold a 44 per cent interest. Nordstar would retain a 65 per cent interest in Toronto Star Inc.
Bitove, owner of Nordstar, would be chairman of the merged entity and Andrew MacLeod, chief executive of Postmedia, would be CEO.
Postmedia, which owns publications including the National Post, Vancouver Sun and Calgary Herald, said the proposal would see the Toronto Star maintain editorial independence through the incorporation of a new company that would manage its editorial operations.
It says the deal would involve converting some of its outstanding debt to equity, resulting in "significant economic dilution" to existing shareholders, while reducing the overall debt of the merged entity.
"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 in the release.
"The proposed merged entity would provide the best opportunity to ensure strong news media coverage for Canadians from coast to coast."
While many of the details are yet to be confirmed, it's not clear that the deal would lead to better coverage, said Christopher Waddell, professor emeritus at the School of Journalism and Communication at Carleton University.
“It’s not clear to me ... how this accomplishes what they’re saying they’re going to accomplish in being able to invest more money and produce a strong news media coverage for Canadians.”
He said the pace of contraction among news organizations has been accelerating amid declining ad revenues and audience numbers, and that this deal looks to be the result.
“There’s more than a little bit of desperation.”
Postmedia has been struggling financially for years, saddled with extensive debt. It reported a net loss of $20.8 million in its latest quarterly results, while in its last full fiscal year it paid $31 million in interest expenses while carrying about $275 million in debt.
The company announced significant layoffs in January this year, with around 11 per cent of editorial staff to be affected. In recent years, Postmedia has closed a number of small-town newspapers, reduced print production of some of its titles, and moved some to digital-only formats to manage costs, among other layoffs and buyout offers.
Last week, Jamie Irving resigned as executive chair of the media conglomerate's board. He had held the role for less than seven months after assuming the role when longtime Postmedia chairman Paul Godfrey stepped down.
Postmedia said it confirmed the discussions in light of unusual trading activity, which saw its share price climb by more than 50 per cent on the day.
This report by The Canadian Press was first published June 27, 2023.
———
Torstar holds an investment in The Canadian Press as part of a joint agreement with subsidiaries of The Globe and Mail and Montreal’s La Presse.
Companies in this story: (TSX:PNC.B)
The Canadian Press
Derek Decloet
Tue, June 27, 2023
(Bloomberg) -- Newspaper chain Postmedia Network Canada Corp. is in talks to merge with the owner of the Toronto Star, a deal that would reshape a domestic news industry that’s been crushed by falling revenue.
The two companies disclosed the non-binding discussions on Tuesday after a 56% jump in the price of Postmedia shares, which rarely trade.
Holders of Postmedia, which owns titles including the National Post and the Calgary Herald, would get a 56% economic interest in the merged entity, while private equity firm Nordstar Capital LP would get 44%. Closely held Nordstar and its publisher, Jordan Bitove, would keep majority control of the Star, one of the Canada’s largest newspapers, which would have editorial independence from the parent company.
The companies said they’re also considering a debt-for-equity swap that would lead to “significant” dilution for existing shareholders. Postmedia had C$287 million ($217 million) in long-term debt and lease liabilities as of Feb. 28, according to data compiled by Bloomberg.
Postmedia has lost about a third of revenue since 2018 because of falling advertising and circulation revenue. The company produced operating income of just C$13 million, excluding depreciation, amortization, restructuring and other costs, in the fiscal year ended Aug. 31. The company’s interest expense during the year was C$31 million.
“The news media industry in Canada and around the world is under existential threat, new models are urgently required,’ Postmedia Chief Executive Officer Andrew Macleod said in a statement.
Postmedia newsrooms have been gutted by staff cuts, and earlier this year the company told employees of the Vancouver Sun and Province, its major titles in Canada’s third-largest city, to work from home permanently so it could get rid of office space.
“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,” Bitove said.
Bitove and Paul Rivett bought the Star and other newspapers in 2020 in a C$60 million takeover of Torstar Corp. But the two men had a public falling out last year, partly over plans to cut costs, and they ended their partnership. Rivett had been quoted as saying the Star was losing C$1 million a week.
Last week, Prime Minister Justin Trudeau’s government passed a new law intended to force major technology platforms such as Alphabet Inc. and Meta Platforms Inc. to pay money to news publishers. Both companies have protested the law, and Meta has threatened to block news links in Canada on Facebook and Instagram rather than pay.
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