TORSTAR TAKES ANOTHER CRACK AT SUN MEDIA
By Adnews Staff
Toronto-based Torstar isn't giving up on Sun Media of Toronto. The publishing company has upped its bid to buy Sun Media to $900 million in a cash and common share deal. The offer is open for acceptance until Dec. 23 and is conditional upon at least 66 2/3% of the common shares of Sun Media on a fully diluted basis. The agreement would also be subject to necessary regulatory approvals. "There is a remarkable fit between the two companies," Torstar president and CEO David Galloway says in a release. "Both companies have operations in broadsheets, weekly newspapers and new media. There are unique opportunities for synergies and sharing of best practices in these lines of business." Under the deal, Sun Media will operate as a separate division of Torstar and will keep the business, editorial and market focus the newspapers already have. There will be opportunities for joint arrangements in areas such as distribution and newsprint, as well as corporate overhead. The transaction would give Torstar 26% of the total average weekly circulation of daily newspapers in Canada. The agreement would also help Torstar expand its new media opportunities, putting the organization in a position to spread the high cost of development of such new media as electronic classifieds over a much larger circulation base. Torstar originally made a bid for Sun Media in October, offering the publisher $748 million. Sun Media turned down the deal because the offer was too low. The company also felt the non-voting shares offered wouldn't give Sun Media shareholders any influence on the future decisions of Torstar. In addition, the Torstar offer would create almost a monopoly for local retail and classified advertisers in Toronto and southern Ontario. If the bid succeeded, Sun Media says Torstar would control over 80% of the retail and classified advertising in major daily newspapers in Toronto.