By: Mark Fitzgerald
The $1 billion blockbuster deal to buy Canwest’s stable of newspapers ranging from the Ottawa Citizen to the Vancouver Sun closed Tuesday afternoon, its new owner, Postmedia Network Canada Corp. announced.
Postmedia Network, led by CEO Paul Godfrey, a veteran tabloid publisher who was most recently head of the National Post, immediately said it intends to be listed on the Toronto Stock Exchange.
Postmedia Network becomes the largest publisher of paid English-language dailies in Canada.
Though the final US$1.07 billion bankruptcy is high by the standards of the last few rocky years of newspaper publishing, it is not the biggest newspaper deal swung in Canada. That distinction actually goes to Canwest, which bought the old Southam Newspapers from Conrad Black’s Hollinger International in a deal valued at $2.1 billion.
The closing brought an end to a long slog through bankruptcy court and an auction process that attracted a bid from Torstar Corp.
Under terms of the sale, senior lenders who were owed some $950 million were paid substantially in full. Godfrey headed an ad hoc committee of holders of senior subordinated notes who get a 45% equity stake in the new company.
The committee said it is making a $250 million equity investment in Postmedia Network.
“It has been a long journey to get to this day and now we begin the work of transforming from a traditional media company to a fully integrated multi-media company with a new brand, a refocused strategy and a determination to be at the forefront of industry change,” Godfrey said.
The company announced its new name earlier this month, saying it represented both the past, in its reference to its flagship National Post, and the future of media.
Postmedia Network has also been vocal about taking a “digital-first” approach to publishing.