NordStar to buy Torstar in take-private deal

NordStar Capital has agreed to acquire Torstar Corp in a take-private deal valued at C$52 million, reported the Toronto Star.

NordStar Capital has agreed to acquire Torstar Corp in a take-private deal valued at C$52 million, reported the Toronto Star. PointNorth Capital is backing NordStar in the transaction. Hamblin Watsa Investment Counsel, an affiliate of Fairfax Financial, has agreed to vote for the deal. Torstar is the owner of the Toronto Star and other Canadian media outlets.


TORONTO, May 26, 2020 /CNW/ – Torstar Corporation (“Torstar”) (TSX:TS.B) today announced it has entered into an arrangement agreement with NordStar Capital LP (“NordStar”) for NordStar to acquire Torstar. Torstar’s businesses include the Toronto Star and a portfolio of other news media businesses.

Torstar believes that the transaction offers shareholders a significant premium. Further, Torstar believes the transaction will allow for the continuation of the company’s storied history: a home for world class, local journalism and fearless, progressive positions. Under the terms of the transaction, NordStar, controlled by Jordan Bitove and Paul Rivett and wholly-owned by the Bitove and Rivett families, will acquire all of the issued and outstanding Class A shares and Class B non-voting shares of Torstar for $0.63 in cash per share, representing a 66.67% premium to the 20-day volume-weighted average trading price of the Class B non-voting shares on the Toronto Stock Exchange as at May 25, 2020.

The transaction was unanimously recommended by a special committee of Torstar’s Board of Directors (the “Board”) and approved by the Board, has received the support of a significant majority of the Class A shareholding members of the Voting Trust and is supported by Torstar’s largest independent shareholder, Fairfax Financial Holdings Limited (“Fairfax Financial”). Upon completion of the transaction, Torstar will be taken private.

“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” said John Honderich, chair of the Board of Torstar. “We hope the sale will benefit Torstar in the years ahead and believe that this is the beginning of an exciting new chapter for the company. We are delighted to know that the new owners have pledged to build on Torstar’s legacy of quality journalism and to promote the Atkinson Principles at the Toronto Star.”

“We believe in news. With this transaction we can ensure a future for world-class journalists and world-class journalism befitting the Star’s storied history,” said Jordan Bitove. “My family has always sought to contribute to the fabric of this country. Today’s announcement reflects those values and builds on that history. We are committed to investing in the news business, along with preserving the Atkinson Principles, as fairness and accuracy will continue to guide the papers’ prevailing value system. While the company’s business will become private, its focus will remain steadfastly public. As the business of news changes, the Toronto Star’s founding principles will not.”

NordStar has advised that former Ontario premier David Peterson has agreed to be appointed as Vice Chair of the Toronto Star following completion of the transaction.

Torstar CEO John Boynton is expected to continue in his role following the completion of the transaction and the new owners have expressed their support for, and commitment to, the organization’s transformation strategy.

“Since its inception as the Evening Star, the Star has been the voice of this city. As Canada’s largest daily newspaper, it has fulfilled a vital civic role as an outlet for expert opinion and what’s trusted as true,” said Paul Rivett. “Jordan and I are very excited to become involved with the business that Joe Atkinson built and we are very fortunate to have the Honourable David Peterson, former Premier of Ontario, as our Vice Chair of the Toronto Star.”

Torstar expects to mail an information circular in June 2020 for a special meeting of the Class A and Class B shareholders, expected to be held in mid-July 2020 to approve the transaction (the “Special Meeting”). Assuming the timely receipt of all required approvals, the transaction is expected to close in the third quarter of 2020.

Recommendation of Torstar Board of Directors
A special committee of independent directors of the Board was formed following an approach by representatives of NordStar in February 2020 in order to provide the Board with its advice and recommendations with respect to the proposal from NordStar, and to supervise the negotiation of the terms and conditions of the transaction. After extensive negotiation and consideration of the proposed transaction, the special committee provided its unanimous recommendation of the transaction to the Board. Having received and considered the recommendation of the special committee, the Board determined that the transaction is in the best interest of the company and recommends that Torstar shareholders vote in favour of the transaction at the Special Meeting.

Each of Blair Franklin Capital Partners Inc. and Marckenz Group Capital Partners has provided the Torstar special committee and the Board with an opinion to the effect that, as of May 26, 2020, the consideration to be received by holders of Torstar shares in the transaction was fair, from a financial point of view, to such holders, subject to the limitations, qualifications, assumptions and other matters set forth in such opinion.

Additional Transaction Details
The transaction is to be completed by way of an arrangement under the Business Corporations Act (Ontario). The arrangement is subject to the approval at the Special Meeting by (i) at least 66⅔% of the votes cast by Class A and Class B shareholders (voting together as a single class) and (ii) a simple majority of the votes cast by holders of the Class A shares and holders of the Class B non-voting shares (each voting as a separate class and excluding shares required to be excluded pursuant to applicable securities laws).

Completion of the transaction is subject to other customary conditions, including receipt of court approval and compliance with the Competition Act (Canada). The transaction is not subject to a financing condition.

The arrangement agreement includes customary provisions relating to non-solicitation, subject to customary “fiduciary out” provisions that entitle Torstar to terminate the arrangement agreement and accept a superior proposal if NordStar does not match the superior proposal. Torstar has agreed to pay NordStar a fee equal to $2 million plus the amount of the NordStar’s transaction expenses (up to an additional $1.5 million) upon the termination of the agreement in certain circumstances, including if Torstar terminates the arrangement agreement to accept a superior proposal. NordStar has agreed to pay Torstar a fee of $3.5 million if NordStar willfully breaches the arrangement agreement, or if after all other conditions to the closing of the transaction have been satisfied or waived, NordStar does not pay the aggregate purchase price of the transaction. The amount of the termination fee payable by NordStar in such circumstances has been deposited with a third-party escrow agent.

Further details regarding the terms of the transaction are set out in the arrangement agreement, which will be publicly filed by Torstar under its profile at Additional information regarding the transaction will also be provided in the information circular for the Special Meeting.

Voting Support Agreements
The trustees of the Torstar Voting Trust (in respect of approximately 93.2% of the shares subject to such trust) have entered into a voting support agreement pursuant to which they have committed to vote in favour of the transaction at the Special Meeting.

Each of the directors who are not also trustees of the Torstar Voting Trust and hold Class A shares or Class B non-voting shares has entered into a voting support agreement pursuant to which each has committed to vote in favour of the transaction at the Special Meeting.

Hamblin Watsa Investment Counsel Ltd. (“HWIC”), a wholly-owned subsidiary of Fairfax Financial, has entered into a voting support agreement (the “Voting Support Agreement”) with NordStar and agreed to vote all of the Class B non-voting shares owned or controlled by Fairfax Financial in favour of the 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. An early warning report will be filed by Fairfax Financial in accordance with applicable securities laws and will be available on SEDAR at or may be obtained directly from Fairfax Financial by contacting General Counsel of Fairfax Financial at (416) 367-4941.

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 arrangement agreement is terminated in accordance with its terms, obligations under the voting support agreements automatically terminate.

Marckenz Group Capital Partners and Blair Franklin Capital Partners Inc. are acting as financial advisors to Torstar. Blake, Cassels & Graydon LLP is legal counsel to Torstar.

NordStar was supported by PointNorth Capital. RBC Capital Markets is acting as financial advisor to NordStar. Norton Rose Fulbright Canada LLP is legal counsel to NordStar. Navigator provided strategic counsel to NordStar.
Torys LLP is legal counsel to Fairfax Financial.

About Torstar Corporation
Torstar Corporation is a broadly-based media company listed on the Toronto Stock Exchange (TSX: 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 (with local editions in Toronto, Vancouver, Calgary, Edmonton, Winnipeg, Ottawa and Halifax),,,, 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.