NordStar optimistic Torstar sale will go through

NordStar optimistic Torstar sale will go through
Just three weeks before the official shareholders’ vote on a $52-million takeover of Torstar Corp., one of the deal’s architects says he’s optimistic it will be approved, and that there’s no higher competing bid coming.

“I’m confident that the shareholders and the board will still see that this offer is fair value,” said entrepreneur Jordan Bitove, who’s partnering with Paul Rivett in the proposed takeover.

The deal, worth 63 cents per share, is being financed by a $55-million loan from Canso Investment Counsel Ltd. That’s a boost from the 56.6 cents a share originally offered by Bitove and Rivett through NordStar Capital, their company created for the takeover.

A shareholders’ meeting to vote on the deal will be held July 21, Torstar announced Majority approval by both Class A shareholders and Class B shareholders is needed. Two-thirds approval of the share classes added together is also needed. Just over 84 per cent of the Class A shareholders and 57 per cent of the Class B shareholders have already signed agreements saying they support the deal. But together, that represents just 60 per cent of the overall shares, meaning there’s no guarantee the deal will go forward.

If either side walks away from the deal — as could happen if a higher bid were to come through — the side that walks would owe the other a $3.5 million break fee.

Bitove says he is not aware of any other offer, even though Torstar’s board was originally in touch with 26 different potential bidders after putting the company on the market. There were four remaining when NordStar put in its initial bid.

“There hasn’t been another offer, and the market doesn’t seem to think there’s going to be one either, judging by the share price,” said Bitove.

Torstar stock closed at 63 cents per share Tuesday, a gain of one cent on the day. Shares have hovered around the 63 cent price since the proposed takeover was announced May 26.

Bitove said NordStar came to the revised price after careful negotiation with Torstar’s board, and pointed to two “fairness opinions” issued by financial analysts calling the deal fair.

“In most transactions, there’s only one fairness opinion,” said Bitove.

If the deal is approved, Bitove said he and Rivett would consider selling some of the company’s non-core assets, in order to invest in the Star.

“Our focus is on the Star’s journalism and digital transformation. And you need capital to support that,” said Bitove. A report published in the Globe and Mail said Bitove and Rivett were seeking up to $100 million from the sale of non-core assets, but Bitove said there’s no exact number.

Torstar’s A class voting shares have been controlled since 1957 by a group of five families, including the Honderich family, the family of longtime publisher Joseph Atkinson, as well as the Hindmarsh, Campbell and Thall families. The Thall family wasn’t in favour of the deal with NordStar, according to regulatory filings.
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