Torstar shareholders give OK to $60M takeover despite other offer worth more on paper
Torstar shareholders voted in favour of a $60 million takeover of the newspaper company, despite the presence of a second offer for the company that's worth more on paper.
The $60-million acquisition of the Torstar Corp. newspaper group by NordStar Capital LP was approved by shareholders Tuesday, despite a rival group's last-minute offer to increase its cash bid.
A preliminary count of votes tallied after a brief online meeting showed the deal recommended by Torstar's board received the necessary support from the company's shareholders.
Although the shareholder vote is a critical step in closing the deal, the transaction remains subject to regulatory and court approvals
The Ontario Securities Commission had received shareholder complaints after the original rival bid was made public but OSC spokeswoman Kate Ballotta said Tuesday that it can't comment further.
John Honderich, who chaired the online meeting, received no questions from shareholders Tuesday.
Honderich said during the meeting, which lasted about 10 minutes, that Torstar's board operated "to the highest level of corporate governance" and received "excellent" outside legal advice.
"I feel our process was very sound," Honderich said.
He also noted that any deal requires approval from the Torstar Voting Trust, which is controlled by five families including the Honderiches, as well as a majority of class B non-voting shares.
Through the trust's control of class A voting shares, the five families have been the guardians of a set of principles established for the Toronto Star by Joseph Atkinson, a former owner and publisher.
"The families have held control for more than 63 years and I'm proud to say not one voting share has been sold in this period," Honderich said.
"The families' dedication to the company has been a constant. They are uniting in saying this outcome is in the best interests of the company.
Among other things, the NordStar bid includes a promise to uphold the Atkinson Principles, which are seen to represent a progressive or liberal perspective.
The Torstar board issued a statement Monday that NordStar's amended offer remained superior to the latest proposal from Canadian Modern Media Holdings Inc.
CMMH increased its proposed offer to 80 cents per share in cash on Monday but Torstar said NordStar's offer of 74 cents per share was superior because it could be completed more quickly.
NordStar's initial offer was worth $52 million or 63 cents per share when announced on May 27 but was increased after the rival group came forward with another proposal on July 10.
Honderich said in a statement issued Monday that CMMH's submission on Monday was "disingenuous and made for the purpose of confusing shareholders and obfuscating its own missteps."
He said in the statement that the Torstar board believes the NordStar transaction "is in the best interests of Torstar and all its stakeholders, and looks forward to a successful completion."
Under the NordStar plan, Torstar will delist its shares from the Toronto Stock Exchange and the publishing business will continue to be managed by its current executive team.