By: Mark Fitzgerald
Sun-Times Media Group (STMG) stock soared in early trading on news that it had settled at least one Canadian tax liability for far less than expected.
STMG stock (NYSE: SVN) opened at $5.11 and was quickly bid up to $6.94. At 12:12 p.m. EDT, it was trading at $6.25, up $1.24 or 24.75%.
Trading volume was nearly triple the three-month average for the stock.
STMG has traded in a 52-week range of $3.82 to $8.35.
After the close of yesterday’s trading, STMG announced it had agreed to pay US$40 million to the Canada Revenue Agency to resolve the tax issues related to the $2.1 billion sale of newspapers to CanWest Global Communications. That sale, in 2000, was orchestrated by then-Chairman Conrad Black when the company was known as Hollinger International.
STMG had said it is carrying a potential $605 million in liabilities related to Canadian tax claims.
The chain, which publishes the Chicago Sun-Times and about 100 nearby papers, said the settlement would result in a “material reduction” in that huge reserve, which has deterred potential buyers.