Upon completion of the transaction, the company is expected to be private.
“Since its creation as Evening Star, the Star was the voice of this city. As Canada’s largest daily, it has fulfilled a vital civic role as an outlet for expert opinion and what is believed to be true, “said Rivett in a statement.
According to the press release, NordStar has indicated that former Ontario Premier David Peterson will be appointed vice-president of the Toronto Star once the deal is done.
Under the terms of the agreement, Bitove and Rivett will acquire all of the Class A and non-voting Class B shares of Torstar for 63 cents per share – a premium of 67% over the volume-weighted average price over 20 days of class B shares as of May 25.
Torstar shares fell 17% on Tuesday to close at 40 cents, about the same price they traded when the COVID-19-induced economic shutdown began two and a half months ago.
“We believe the news. With this transaction, we can secure a future for world-class journalists and world-class journalism Star“History is rich in history,” Bitove said in Tuesday’s press release. “We are committed to investing in the news sector, while upholding Atkinson’s principles, as fairness and precision will continue to drive the dominant value system of the newspapers. “
The transaction was supported by the media company’s largest independent shareholder, Fairfax Financial, which owns approximately 4% of the non-voting Class B shares of Torstar.
Rivett was president of Fairfax Financial for 17 years before retiring in February, although he remained president of several Fairfax participating companies, including Recipe Unlimited and Fairfax Africa.
A meeting of all Class A and B shareholders will be convened in mid-July to approve the transaction, and the deal is expected to close by fall 2020.
“We are grateful for the tremendous contribution of thousands of employees who have worked over the years to make Torstar so great. However, we also realized that for Torstar to succeed now, you need a new property with both resources and determination, “wrote John Honderich, president and member of one of the five founding families of the newspaper chain in one Toronto Star op-ed.
“We have tried to innovate and adopt new strategies to succeed in this new world … but frankly, it has been a difficult struggle.”
Torstar, like many other newspaper chains across North America, has seen its revenues erode dramatically in the past decade due to the decline in popularity of print newspapers and the emergence of giants Facebook and Google technology, which have captured the majority of digital media. advertising revenue.
The company’s losses increased in the first three months of 2020, in part due to the impact of the coronavirus on advertising revenue, which fell 20% from the same period last year.
Torstar shares have been declining steadily since peaking at over $ 30 in 2004.
The media company, which owns six other daily newspapers in Ontario, including the Hamilton spectator and about 70 newspapers and community news sites have repeatedly attempted to reverse his fortune.
In 2015, the company paid $ 200 million for a 56% stake in VerticalScope Holdings Inc., a digital media company with 600 consumer forums and content sites.
Torstar has also invested tens of millions of dollars in Star Touch, a tablet app only launched in 2015 and discontinued in 2017.
Last December, the company shut down many of its Star Metro print editions and announced a wave of layoffs and voluntary buyouts for editorial staff.
– With staff files from the Financial Post