HOLLINGER SELLS CANADIAN ASSETS

By: Staff Reports Broadcasting Giant Buys Newspapers, Online Properties



In what is billed as the biggest deal in Canadian newspaper history,
Hollinger International Inc. announced July 31 it has sold most of its
Canadian newspapers, including 50% of the National Post, to broadcasting
giant CanWest Global Communications Corp.



CanWest will pay $1.5 billion plus $406 million in shares and assume
$474 million in debt. The deal includes 13 large metro English-language
dailies, about 136 smaller daily, weekly, and shopper papers, Hollinger's
magazine group, and its Canadian Internet properties, including
canada.com. The price was based on a multiple of 10 times earnings for
the newspapers.



Hollinger will get a 15% share and about 6% voting interest in CanWest.
Its chairman, Conrad Black, will join the CanWest board and become its
second largest shareholder, after the controlling Asper family.



Hollinger earlier this year decided to sell its U.S. and Canadian
community newspapers and seek partnerships for its major metro papers.
It plans to use proceeds from the sales to reduce its sizable debt of
about $1.7 billion and for other purposes.



Hollinger hasn't announced sales of its U.S. community papers. The
company is seeking buyers for all but the Chicago Sun-Times and other
Chicago-area papers.



CanWest owns Canada's 10-station national Global Television Network and
has been expanding its holdings into film and TV production and the
Internet. The company painted its latest transaction as the "ultimate
convergence transaction," uniting print and electronic content with
Internet technology and allowing it to offer advertisers a one-stop
shopping approach to reach mass and targeted audiences.



Hollinger will continue managing the National Post, the national paper
it started in late 1999, for the next five years before turning it over
to management by both companies. CanWest will begin integrating the Post
and Hollinger's Internet properties immediately, however, to take
advantage of ad revenue opportunities through cross-selling.



The deal is subject to approval by the Canadian Competition Bureau.
CanWest maintained that the deal will not diminish the diversity of
Canadian media voices.





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Staff Reports









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