Toronto Star Parent Gets Offer From Two Canadian Families

(Bloomberg) -- The company that owns the Toronto Star and more than 70 other newspapers agreed to be taken private by two prominent Canadian business families.

NordStar Capital LP, owned by the Rivett and Bitove families, has offered to buy Torstar Corp. for 63 Canadian cents a share in cash, according to a statement released Tuesday night. Based on about 81 million class A and B shares outstanding, the deal values Torstar at roughly C$51 million ($37 million). The offer represents a 58% premium to the closing price on Tuesday.

Torstar shares jumped 50% to 60 Canadian cents on Wednesday morning.

The deal represents the end of an era for one of Canada’s largest newspapers, which has been controlled by a voting trust of several Toronto families for decades. Torstar has been unable to turn around years of steady losses in advertising revenue and circulation. As of Tuesday’s market close, the shares had fallen 77% since the end of 2017.

The proposal has the support of Torstar’s board and its largest independent shareholder, Fairfax Financial Holdings Ltd. Torstar Chief Executive Officer John Boynton is expected to continue in his role following the deal and former Ontario Premier David Peterson will serve as vice chair, the companies said. The deal is expected to close in the third quarter.

Nordstar is controlled by Jordan Bitove and Paul Rivett. Rivett was a senior executive at Fairfax, a Toronto-based insurance and investment holding company, when it built its 40% stake in Torstar’s Class B shares. He announced his retirement from the firm in February.

Bitove is a private equity executive whose family was part of the ownership group that brought the Toronto Raptors basketball franchise to the city in the 1990s.

“They definitely have one wheel in the ditch a bit -- but with all traditional media that’s the case,” Rivett said. The company has strong brands and a CEO who has begun its transformation to digital platforms, he said.

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