Media consolidation continues as Quebecor buys Osprey

Osprey Media Income Fund traded up almost five per cent on Friday after the fund struck a $517-million deal to be acquired by Quebecor Media Inc.

Quebecor Media was poised Friday to become the biggest publisher of newspapers in Canada after it struck a friendly deal to acquire theOsprey Media Income Fund and its 54 newspapers.

The deal is worth$517 million.

Osprey Media daily newpapers
Barrie Examiner
Belleville Intelligencer
Brantford Expositor
Chatham Daily News
Cobourg Daily Star
Cornwall Standard-Freeholder
Kingston Whig-Standard
Niagara Falls Review
North Bay Nugget
Orillia Packet & Times
Owen Sound Sun Times
Pembroke Daily Observer
Peterborough Examiner
Port Hope Evening Guide
Sarnia Observer
Sault Star
St. Catharines Standard
Sudbury Star
Timmins Daily Press
Welland Tribune

After the close of trading on Thursday, the companies said Quebecor will pay $7.25 per share for Osprey. Osprey unitsgained 34 cents to close at$7.26 on Friday.

The offer includes a 30.6 per cent premium on the March 5 closing prices of Osprey's unit. On that day, the company said it was reviewing its strategic options, possibly including a sale.

The board of Osprey has recommended that unitholders accept the Quebecor buyout offer.

The Ontario Teachers' Pension Plan and Scotia Merchant Capital Corp. have already agreed to tender the 53.9 per cent stake in the fund they hold.

Osprey owns 20 daily newspapers in Ontario, 34 non-daily papers, plus magazines and other publications. It owns some of the oldest newspapers in the country. The Kingston Whig-Standard, for instance, can trace its roots back to 1834.

Osprey was formed in 2001 when the teachers' pension plan and Michael Sifton acquired some papers from Hollinger for $220 million. The company subsequently added more papers in 2003 from CanWest Global.

Quebecor Media already owns the Sun chain of dailies in Ottawa, Toronto, Calgary and Edmonton, plus the London Free Press, le Journal de Montréal andle Journal de Québec.

Other dailies held by Quebecor include Ontario papers in Brockville, Stratford, St. Thomas, Kenora, Simcoe and Woodstock. The company also has three papers in Alberta and Manitoba, and puts out seven commuter papers.

The deal would make Quebecor the largest publisher of newspapers in Canada and one of only two big chains in Canada; CanWest owns the other.

"We call on Quebecor to continue to invest in the communities where it has bought papers," said union director Arnold Amber, of CWA Canada. "Local news is in jeopardy across Canada and the strength of these newspapers has been delivering local information to small and mid-size communities in Ontario."

With files from the Canadian Press