CPE News (7/12/2020) – NordStar Capital has increased its bid to acquire Torstar Corporation (TSX: TS.B) from $0.63 in cash all of the issued and outstanding Class A shares and Class B non-voting shares of Torstar to $0.74. The new bid values Torstar equity at $60.2 million up from $51.2 million.
NordStar Capital is controlled by Jordan Bitove and Paul Rivett and wholly-owned by the Bitove and Rivett families.
The new amended price results from discussions with NordStar following Torstar’s receipt of an unsolicited offer from a private investor group.
The private investor group proposed to acquire all of the issued and outstanding shares for a combination of $0.72 per share in cash and the issuance of one non-transferable contingent value right per share, with payments (if any) on such right being based on proceeds of dispositions of, and distributions from, select Torstar non-core assets in certain circumstances following issuance. The offer was conditional on, among other things, the entering into of voting support agreements by the trustees of the Torstar Voting Trust and Hamblin Watsa Investment Counsel Ltd. (HWIC), a wholly-owned subsidiary of Fairfax Financial Holdings Limited (TSX: FFH and FFH.U).
The trustees of the Torstar Voting Trust and HWIC have advised the Torstar board of directors of their intent not to support the unsolicited offer and, conditional upon execution of the Amendment, to enter into new voting support agreements with NordStar.
Subject to regulatory and shareholder approvals, the transaction is expected to close in the third quarter of 2020.
photo credit: Torstar
News Release
Torstar Corporation Announces 17.5% Price Increase Under Nordstar Acquisition to $0.74 Per Share
TORONTO, July 11, 2020 /CNW/ – Torstar Corporation (“Torstar”) (TSX: TS.B) today announced that it has entered into an amendment (the “Amendment”) to the arrangement agreement dated May 26, 2020 (the “NordStar Agreement”) between Torstar and NordStar Capital LP (“NordStar”), pursuant to which NordStar has agreed to acquire all of the issued and outstanding Class A shares and Class B non-voting shares of Torstar (the “Shares”) by way of a statutory plan of arrangement at an increased price of $0.74 per Share. The amended purchase price constitutes an increase of 17.5% from the $0.63 per Share payable under the original NordStar Agreement.
The amendment to the NordStar Agreement results from discussions with NordStar following Torstar’s receipt of an unsolicited offer from a private investor group, pursuant to which such group proposed to acquire all of the issued and outstanding Shares for a combination of $0.72 per Share in cash and the issuance of one non-transferable contingent value right per Share, with payments (if any) on such right being based on proceeds of dispositions of, and distributions from, select Torstar non-core assets in certain circumstances following issuance.
As previously disclosed, the private investor group offer was conditional on, among other things, the entering into of voting support agreements by the trustees of the Torstar Voting Trust and Hamblin Watsa Investment Counsel Ltd. (“HWIC”), a wholly-owned subsidiary of Fairfax Financial Holdings Limited (“Fairfax Financial”). The trustees of the Torstar Voting Trust and HWIC have advised the Torstar board of directors (the “Board”) of their intent not to support such unsolicited offer and, conditional upon execution of the Amendment, to enter into new voting support agreements with NordStar (as described below). The Board determined in good faith, after consultation with its financial and outside legal advisors, that (1) the unsolicited offer from the private investor group would not be able to constitute a “Superior Proposal” under the NordStar Agreement, as amended by the Amendment, as such offer would not be reasonably capable of being completed without undue delay relative to the NordStar transaction, and (2) the NordStar Agreement, as amended by the Amendment, is in the best interest of the company and to recommend that Torstar shareholders vote in favour of the NordStar transaction, as amended, at the special meeting of Torstar shareholders scheduled for July 21, 2020 (the “Special Meeting”).
“We appreciate the support that the Torstar Voting Trust, the Board of Directors and HWIC have placed in us,” said Jordan Bitove, CEO of NordStar. “The Toronto Star is a very important pillar of this country, and we intend to do the best we can to ensure this Canadian institution thrives for another hundred years.”
Voting Support Agreements
In connection with the amendment to the NordStar Agreement, the trustees of the Torstar Voting Trust (in respect of approximately 93.2% of the shares subject to such trust) have entered into a new hard lock up voting support agreement pursuant to which they have re-committed to vote in favour of the NordStar transaction at the Special Meeting.
In addition, HWIC has entered into a new hard lock up voting support agreement with NordStar and re-confirmed its agreement to vote all of the Class B non-voting shares owned or controlled by Fairfax Financial in favour of the NordStar 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.
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 NordStar Agreement is terminated in accordance with its terms as a result of the Board’s acceptance of a superior proposal, obligations under the new voting support agreements continue and do not terminate.
Special Meeting
Further details regarding the terms of the transaction are set out in the NordStar Agreement, which is (and in the case of the Amendment, will be) publicly filed by Torstar under its profile at www.sedar.com. Additional information regarding the transaction is also provided in the information circular delivered to Shareholders in connection with the Special Meeting.
There is no change to the Special Meeting date or record date, and no further action is required by Torstar shareholders who have already voted if there is no change to your vote. Shareholders who have questions regarding the NordStar transaction or require assistance with voting may contact Torstar’s transfer agent as provided for in the circular.
About Torstar Corporation
Torstar Corporation is a broadly-based media company listed on the Toronto Stock Exchange (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.
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; ldemarchi@torstar.ca; For Media inquiries, please contact: Bob Hepburn, Director, Communications, Torstar Corporation, (416) 869-4947; bhepburn@thestar.ca