Q: Is this transaction a little unethical when the President of Fairfax builds up a 40% position in Torstar and at the same time involved in a private company and now the same company has offered to take it private? This arrangement does not seem to be fair to Fairfax shareholders?
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, controlled by the Rivett and Bitove families, will acquire 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 $51 million. The offer represents a 58 per cent premium to the closing price on Tuesday.
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. The shares have fallen 77 per cent 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.
Paul Rivett was a senior executive at Fairfax, a Toronto-based insurance and investment holding company, when it built its 40 per cent stake in Torstar’s Class B shares. He announced his retirement from the firm in February.
Jordan Bitove is a partner at private equity firm Spectrum Capital Partners in Toronto. His family was part of the ownership group that brought the Toronto Raptors basketball franchise to the city in the 1990s.
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, controlled by the Rivett and Bitove families, will acquire 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 $51 million. The offer represents a 58 per cent premium to the closing price on Tuesday.
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. The shares have fallen 77 per cent 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.
Paul Rivett was a senior executive at Fairfax, a Toronto-based insurance and investment holding company, when it built its 40 per cent stake in Torstar’s Class B shares. He announced his retirement from the firm in February.
Jordan Bitove is a partner at private equity firm Spectrum Capital Partners in Toronto. His family was part of the ownership group that brought the Toronto Raptors basketball franchise to the city in the 1990s.
