Together, we are writing the next chapter in the Toronto Star’s storied history
Long-standing commitment to progressive positions and fearless journalism will endure
The transaction is a good deal for shareholders, meaningful for the future of local journalism, and benefits Canadian newsreaders who depend on reliable, fact-based reporting.
In these uncertain and challenging times, we need trusted news more than ever. Particularly as Canadians are confronted with the immediate threat posed by COVID-19, we are reminded of our shared need to understand the truth, access expert opinions, and comfort the afflicted and afflict the comfortable with thorough investigative reporting.
With patience and willingness to invest in Torstar’s long-term transformation, we will ensure a future for world-class journalists and world-class journalism.
NordStar has secured approval from Torstar’s Board of Directors and the support of a significant majority of Torstar’s Voting Trust and its largest independent shareholder, Fairfax Financial Holdings Limited for its arrangement agreement.
A private structure is needed to ensure a strong future for these world-class media assets and for the journalists who work there.
Under the terms of the transaction, NordStar will acquire all of the issued and outstanding Class A shares and Class B non-voting shares of Torstar for $0.63 in cash per share, representing a 66.67% premium to the 20-day volume-weighted average trading price of the Class B non-voting shares as at May 25, 2020.
The purchasers have secured voting support agreements with the Voting Trust and Fairfax Financial in respect of approximately 60.8% of the total number of issued and outstanding shares.
NordStar Capital To Acquire TorstarNordStar Capital May 26, 2020
- NordStar has secured approval from Torstar’s Board of Directors and the support of a significant majority of Torstar’s Voting Trust and its largest independent shareholder, Fairfax Financial for its arrangement agreement
- A private structure is needed to ensure a strong future for these world-class media assets and for the journalists who work there
- NordStar will honour the Toronto Star’s storied history by retaining its long-standing commitment to progressive positions and fearless journalism
- Former Ontario Premier the Honourable David Peterson will be appointed Vice Chair of the Toronto Star on completion
‘Our focus is on the long-term viability of the business’Toronto Star May 26, 2020
The two men behind the entity seeking to buy Torstar Corp., one of Canada’s biggest media companies, are no strangers to thinking boldly.
Jordan Bitove is one of the key members of the group that launched the Toronto Raptors basketball team and Paul Rivett is a former president of Fairfax Financial Holdings, one of the biggest global insurance and investing firms in Canada.
Together they are looking to purchase all of Torstar, including the Toronto Star, the most widely read print newspaper in the country.
NordStar Capital, an entity the men control, announced Tuesday it has entered into an agreement with Torstar to acquire all of Torstar. The deal is subject to shareholder approval.
Who are Bitove and Rivett?
And why do they want to buy Torstar?
Bitove is a second-generation Canadian and runs a private equity and real estate group in Toronto. Coming from one of Canada’s great nation-building families, he contributed significantly to the start-up of the Toronto Raptors, the first NBA franchise awarded outside of the United States and Canadian Olympic bids.
He and his family were part of the initial ownership group that conceived and started construction of the Air Canada Centre, now Scotiabank Arena. In 1986, his family were part of ownership consortium to build SkyDome, the world’s first fully retractable roofed stadium. In 1978 the family opened the first Hard Rock Cafe in North America in Toronto…
‘So we pass the torch’John Honderich May 26, 2020
While it is far from easy, the time has come to pass the torch.
The torch, in this case, is control of the Toronto Star, Hamilton Spectator, Waterloo Region Record, St. Catharines Standard, three other dailies, some 70 weeklies and a host of digital and special investments.
Today, Toronto entrepreneurs Jordan Bitove and Paul Rivett have announced their intent to acquire the entire company.
As part of the deal, Bitove has committed to build on Torstar’s storied legacy and also to adhere to the Atkinson Principles, which have been a cornerstone of the flagship Toronto Star.
Our great spiritual founder Joseph Atkinson declared ownership of newspapers in his will as a “sacred trust.” And the five families — the Atkinsons, Hindmarshs, Campbells, Thalls and Honderichs — are immensely proud of our tradition of editorial excellence and long-time financial success.
We salute, without hesitation, the huge contribution of thousands of employees who have worked over the years to make Torstar so great.
However, we have also come to realize that for Torstar to succeed now, it requires new ownership with both resources and determination.
Jordan Bitove and Paul Rivett bring precisely that. Jordan Bitove once had a Star paper route and says “I have always been a follower of the paper.” His family brought both the world Championship of Basketball and the Raptors to the city. His brother John led Toronto’s 2008 Olympic bid. Paul Rivett recently stepped down as president of the immensely successful Fairfax Financial Holdings Ltd.
No one disputes that the business model for newspapers has come under immense pressure. In this new digital era, with Facebook and Google taking the lion’s share of all digital advertising, media outlets have been going under across North America. The COVID-19 crisis has made the situation even worse…
Torstar to be sold, taken private in $52-million dealToronto Star May 26, 2020
Torstar Corp. announced Tuesday it has entered into an agreement with an entity controlled by two prominent Toronto businessmen for them to acquire the entire news media company, including its flagship newspaper the Toronto Star.
Under the terms of the arrangement, NordStar Capital LP, which is controlled by Jordan Bitove and Paul Rivett, will acquire all of Torstar’s shares and take the company private.
Besides the Toronto Star, Torstar owns six other daily newspaper in Ontario including The Hamilton Spectator and Waterloo Region Record, some 70 community newspapers and numerous news sites and digital properties.
“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” John Honderich, chair of Torstar’s board of directors, said in a press release announcing the transaction.
“We hope the sale will benefit Torstar in the years ahead and believe that this is the beginning of an exciting new chapter for the company. We are delighted to know that the new owners have pledged to build on Torstar’s legacy of quality journalism and to promote the Atkinson Principles at the Toronto Star.”
Bitove and Rivett are both well known in Canadian business and civic-minded organizations.
Bitove played a major role in the start-up of the Toronto Raptors basketball team and Toronto’s bid for the 2008 Olympic Games. He is also on the board of directors of the SickKids Foundation…
Nordstar Capital to Acquire Torstar CorporationTorstar May 26, 2020
Secured approval from Torstar’s Board of Directors and the support of a significant majority of Torstar’s Voting Trust and Fairfax Financial, Torstar’s largest independent shareholder
TORONTO, May 26, 2020 /CNW/ – Torstar Corporation (“Torstar”) (TSX:TS.B) today announced it has entered into an arrangement agreement with NordStar Capital LP (“NordStar”) for NordStar to acquire Torstar. Torstar’s businesses include the Toronto Star and a portfolio of other news media businesses.
Torstar believes that the transaction offers shareholders a significant premium. Further, Torstar believes the transaction will allow for the continuation of the company’s storied history: a home for world class, local journalism and fearless, progressive positions. Under the terms of the transaction, NordStar, controlled by Jordan Bitove and Paul Rivett and wholly-owned by the Bitove and Rivett families, will acquire all of the issued and outstanding Class A shares and Class B non-voting shares of Torstar for $0.63 in cash per share, representing a 66.67% premium to the 20-day volume-weighted average trading price of the Class B non-voting shares on the Toronto Stock Exchange as at May 25, 2020. The transaction was unanimously recommended by a special committee of Torstar’s Board of Directors (the “Board”) and approved by the Board, has received the support of a significant majority of the Class A shareholding members of the Voting Trust and is supported by Torstar’s largest independent shareholder, Fairfax Financial Holdings Limited (“Fairfax Financial”). Upon completion of the transaction, Torstar will be taken private.
“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” said John Honderich, chair of the Board of Torstar. “We hope the sale will benefit Torstar in the years ahead and believe that this is the beginning of an exciting new chapter for the company. We are delighted to know that the new owners have pledged to build on Torstar’s legacy of quality journalism and to promote the Atkinson Principles at the Toronto Star.”
“We believe in news. With this transaction we can ensure a future for world-class journalists and world-class journalism befitting the Star’s storied history,” said Jordan Bitove. “My family has always sought to contribute to the fabric of this country. Today’s announcement reflects those values and builds on that history. We are committed to investing in the news business, along with preserving the Atkinson Principles, as fairness and accuracy will continue to guide the papers’ prevailing value system. While the company’s business will become private, its focus will remain steadfastly public. As the business of news changes, the Toronto Star’s founding principles will not.”
NordStar has advised that former Ontario premier David Peterson has agreed to be appointed as Vice Chair of the Toronto Star following completion of the transaction.
Torstar CEO John Boynton is expected to continue in his role following the completion of the transaction and the new owners have expressed their support for, and commitment to, the organization’s transformation strategy.
“Since its inception as the Evening Star, the Star has been the voice of this city. As Canada’s largest daily newspaper, it has fulfilled a vital civic role as an outlet for expert opinion and what’s trusted as true,” said Paul Rivett. “Jordan and I are very excited to become involved with the business that Joe Atkinson built and we are very fortunate to have the Honourable David Peterson, former Premier of Ontario, as our Vice Chair of the Toronto Star.”
Torstar expects to mail an information circular in June 2020 for a special meeting of the Class A and Class B shareholders, expected to be held in mid-July 2020 to approve the transaction (the “Special Meeting”). Assuming the timely receipt of all required approvals, the transaction is expected to close in the third quarter of 2020.
Recommendation of Torstar Board of Directors
A special committee of independent directors of the Board was formed following an approach by representatives of NordStar in February 2020 in order to provide the Board with its advice and recommendations with respect to the proposal from NordStar, and to supervise the negotiation of the terms and conditions of the transaction. After extensive negotiation and consideration of the proposed transaction, the special committee provided its unanimous recommendation of the transaction to the Board. Having received and considered the recommendation of the special committee, the Board determined that the transaction is in the best interest of the company and recommends that Torstar shareholders vote in favour of the transaction at the Special Meeting.
Each of Blair Franklin Capital Partners Inc. and Marckenz Group Capital Partners has provided the Torstar special committee and the Board with an opinion to the effect that, as of May 26, 2020, the consideration to be received by holders of Torstar shares in the transaction was fair, from a financial point of view, to such holders, subject to the limitations, qualifications, assumptions and other matters set forth in such opinion.
Additional Transaction Details
The transaction is to be completed by way of an arrangement under the Business Corporations Act (Ontario). The arrangement is subject to the approval at the Special Meeting by (i) at least 66⅔% of the votes cast by Class A and Class B shareholders (voting together as a single class) and (ii) a simple majority of the votes cast by holders of the Class A shares and holders of the Class B non-voting shares (each voting as a separate class and excluding shares required to be excluded pursuant to applicable securities laws). Completion of the transaction is subject to other customary conditions, including receipt of court approval and compliance with the Competition Act (Canada). The transaction is not subject to a financing condition.
The arrangement agreement includes customary provisions relating to non-solicitation, subject to customary “fiduciary out” provisions that entitle Torstar to terminate the arrangement agreement and accept a superior proposal if NordStar does not match the superior proposal. Torstar has agreed to pay NordStar a fee equal to $2 million plus the amount of the NordStar’s transaction expenses (up to an additional $1.5 million) upon the termination of the agreement in certain circumstances, including if Torstar terminates the arrangement agreement to accept a superior proposal. NordStar has agreed to pay Torstar a fee of $3.5 million if NordStar willfully breaches the arrangement agreement, or if after all other conditions to the closing of the transaction have been satisfied or waived, NordStar does not pay the aggregate purchase price of the transaction. The amount of the termination fee payable by NordStar in such circumstances has been deposited with a third-party escrow agent.
Further details regarding the terms of the transaction are set out in the arrangement agreement, which will be publicly filed by Torstar under its profile at www.sedar.com. Additional information regarding the transaction will also be provided in the information circular for the Special Meeting.
Voting Support Agreements
The trustees of the Torstar Voting Trust (in respect of approximately 93.2% of the shares subject to such trust) have entered into a voting support agreement pursuant to which they have committed to vote in favour of the transaction at the Special Meeting.
Each of the directors who are not also trustees of the Torstar Voting Trust and hold Class A shares or Class B non-voting shares has entered into a voting support agreement pursuant to which each has committed to vote in favour of the transaction at the Special Meeting.
Hamblin Watsa Investment Counsel Ltd. (“HWIC”), a wholly-owned subsidiary of Fairfax Financial, has entered into a voting support agreement (the “Voting Support Agreement”) with NordStar and agreed to vote all of the Class B non-voting shares owned or controlled by Fairfax Financial in favour of the transaction at the Special Meeting. Fairfax Financial currently owns and controls, directly and in the investment portfolios of its insurance subsidiaries, 28,876,337 Class B non-voting shares, representing 40.3% of the outstanding Class B non-voting shares. An early warning report will be filed by Fairfax Financial in accordance with applicable securities laws and will be available on SEDAR at www.sedar.com or may be obtained directly from Fairfax Financial by contacting General Counsel of Fairfax Financial at (416) 367-4941.
The 8,264,022 Class A shares and 41,272,161 Class B non-voting shares subject to such voting support agreements represent approximately 84.3% and 57.6% of the Class A shares and Class B non-voting shares, respectively, and an aggregate of approximately 60.8% of the total number of issued and outstanding Class A shares and Class B non-voting shares. In the event the arrangement agreement is terminated in accordance with its terms, obligations under the voting support agreements automatically terminate.
Marckenz Group Capital Partners and Blair Franklin Capital Partners Inc. are acting as financial advisors to Torstar. Blake, Cassels & Graydon LLP is legal counsel to Torstar.
NordStar was supported by PointNorth Capital. RBC Capital Markets is acting as financial advisor to NordStar. Norton Rose Fulbright Canada LLP is legal counsel to NordStar. Navigator provided strategic counsel to NordStar.
Torys LLP is legal counsel to Fairfax Financial.
About Torstar Corporation
Torstar Corporation is a broadly-based media company listed on the Toronto Stock Exchange (TSX: TS.B). Its businesses include the Toronto Star, Canada’s largest daily newspaper, six regional daily newspapers in Ontario including The Hamilton Spectator, and more than 70 weekly community newspapers in Ontario; flyer distribution services: and digital properties including thestar.com (with local editions in Toronto, Vancouver, Calgary, Edmonton, Winnipeg, Ottawa and Halifax), wheels.ca, toronto.com, save.ca, a number of regional online sites and eyeReturn Marketing. It also holds a majority interest in VerticalScope, a North American vertically-focused digital media company,
Certain statements in this press release and in Torstar’s oral and written public communications may constitute forward-looking statements that reflect management’s expectations regarding Torstar’s future growth, financial performance and business prospects and opportunities, including in respect of the proposed transaction, as of the date of this press release. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “forecast”, “expect”, “estimate”, “predict”, “intend”, “would”, “could”, “if”, “may” and similar expressions.
This press release includes, among others, forward-looking statements regarding Torstar’s expectations regarding: the anticipated benefits of the transaction; the impact of the transaction on the Toronto Star and the company’s other media businesses; the management and governance of the company following closing of the transaction; the anticipated timing for the Special Meeting to approve the transaction; the timing and anticipated receipt of required regulatory approvals; and the anticipated timing for closing the transaction. All such statements are made pursuant to the “safe harbour” provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this press release. In addition, forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
By their very nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management’s assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements.
These factors include, but are not limited to: general global economic, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; relationships with employees, customers, business partners and competitors; and diversion of management time on the transaction. There are also risks that are inherent in the nature of the transaction, including failure to satisfy the conditions to the completion of the transaction and failure to obtain any required regulatory and other approvals (or to do so in a timely manner). The anticipated timeline for completion of the transaction may change for a number of reasons, including the inability to secure necessary regulatory, court or other approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the transaction. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of the transaction.
Torstar cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results.
When relying on our forward-looking statements to make decisions with respect to Torstar and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Torstar does not intend, and disclaims any obligation, to update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.
Torstar’s news releases are available on the Internet at www.torstar.com.
SOURCE Torstar Corporation
For further information: For Investor Relations inquiries, please contact: L. DeMarchi, Executive Vice-President and Chief Financial Officer, Torstar Corporation, (416) 814-2774; firstname.lastname@example.org; For Media inquiries, please contact: Bob Hepburn, Director, Communications, Torstar Corporation, (416) 869-4947; email@example.com
What does this mean for the Toronto Star?
It means two things. From a business perspective, we believe there is a bright future. With patient capital, and a willingness to invest in journalism, we will deliver news that matters. And from an editorial perspective, nothing will change. NordStar will honour the Toronto Star’s storied history by retaining its long-standing commitment to progressive positions and fearless journalism.
Is this a good deal for Torstar shareholders?
The transaction is a good deal for shareholders at a 66.67% premium to the 20-day volume-weighted average trading price of the Class B non-voting shares as at May 25, 2020. It was approved by Torstar’s Board of Directors, has received the support of a significant majority of the Class A shareholding members of the Voting Trust, was unanimously recommended by a special committee of Torstar’s Board of Directors, and is supported by Torstar’s largest independent shareholder, Fairfax Financial.
Two independent investment banks provided a favourable fairness opinion to a special committee of Torstar’s Board of Directors as well as the Board.
In short, the harsh realities of the news media business are ill-suited to the quarter-bound short-term focus of shareholders. A private structure is needed and we have the patience and willingness to invest in Torstar’s long-term transformation.
Who is NordStar Capital?
We are civic-minded Canadians who believe and want to invest in news.
Jordan Bitove is an accomplished entrepreneur. Coming from one of Canada’s great nation-building families, he contributed significantly to the start-up of the Toronto Raptors Basketball Club, the first NBA franchise awarded outside of the United States, and Toronto’s bid for the 2008 Olympic Games. Mr. Bitove is on the Board of Directors of the SickKids Foundation. He was a Board of Governor for Western University, a former member of the Toronto International Film Festival Board of Directors and a former member of the Canadian Advisory Board for Right to Play.
Paul Rivett recently retired as the President of Fairfax Financial Holdings Limited after 17 years with the company. He remains on the Board of Directors of certain Fairfax investees, including Chairman of Recipe Unlimited.
Will the editorial process be changed?
No. Editorial leadership will maintain editorial control and the paper’s progressive position and commitment to fearless journalism will remain constant. For more than a century, the Atkinson Principles have given the Star its distinctive voice and they will continue to guide editorial policy under the publishers’ stewardship.
What will change with Torstar as a private company?
A private structure is needed to ensure a strong future for these world-class media assets and for the journalists who work there. In short, the harsh realities of the news media business are ill-suited to the quarter-bound short-term focus of shareholders. We have the patience and willingness to invest in Torstar’s long-term transformation to ensure a future for world-class journalists and world-class journalism.
Will Torstar's corporate leadership remain in place?
Torstar CEO John Boynton has agreed to continue in his role and NordStar has expressed their support for, and commitment to, the organization’s transformation strategy.
What does this mean for Torstar employees?
Hopefully, it is a sign of reassurance. We know how difficult these past months and years have been. The business is only as good as the product and the product will benefit from steady, long-term investment. We can provide stability and help the paper move away from the quarter-bound, short-term focus of shareholders, to preserve the business and its prevailing value system.