On D-Day for Canada's Biggest Newspaper Sale, Bid by 'Toronto Star' Parent Seen Faltering

By: E&P Staff With just hours left Friday to bid on Canwest LP's chain of 46 newspapers -- the biggest newspaper sale in Canadian history -- Torstar Corp., the big publisher considered the front-runner for week, was having problems with its bid, Canadian media reported.

The Canadian Press, for instance, reported in early afternoon that Torstar's bid was "hanging on by a thread." The bids are due Friday night. Creditors of the bankrupt Canwest LP have set a C$950 million (US$934 million) minimum for bids.

Like other news outlets, the CP report, citing an unnamed "source close to the bidding process," said the hang-up for Torstar is getting the financing expected from Fairfax Financial, an insurance and investment management firm.

The Globe and Mail reported earlier that Fairfax "has told bankers it has decided against bankrolling the purchase, according to sources close to the matter."

Torstar's anticipated offer was an all-cash bid for Canwest LP, the newspaper arm of media giant Canwest Global Communications that includes such dailies as the National Post, Vancouver Sun and Ottawa Citizen.

A purchase would make Torstar, publisher of Canada's largest daily, The Toronto Star, and 97 other Ontario papers, easily the largest chain in the nation.

CP reports Fairfax -- which already owns a 22% stake in Canwest as well as 19% of Torstar -- would prefer a mix of cash and bank financing, and is encountering resistance from banks skeptical about the prospects of the newspaper business.

And it's not just the newspaper business worrying bankers, the Globe and Mail says:

"Hampering matters are the debt troubles in Greece, which illustrate the potential danger still lurking in the global financial system. That uncertainty is making both financial institutions and prospective bidders more cautious," said the story by Grant Robertson, Tara Perkins and Andrew Willis.

David Black, whose Honolulu Star-Bulletin just got clearance to buy the market-leading Honolulu Advertiser from Gannett Co. and merge the two dailies, is reportedly also bidding on the Canwest papers.

Former Canwest CEO Leonard Asper, of the media company's founding family, is also bidding, with the backing of the Macquarie Group in Australia and the Serruya family, makers of the CoolBrands International products, the Globe and Mail reported.