Torstar, the publisher of the Toronto Star and Star.com, has been sold for approximately $52 million to NordStar Capital, run by entrepreneurs Jordan Bitove and Paul Rivett and wholly-owned by their families. Former Ontario premier David Peterson will serve as vice chair of the company, and John Boynton will remain Torstar’s CEO. Torstar’s board of directors have approved the transaction, as have the majority of Class A voting shareholders. NordStar will purchase all issued and outstanding Class A (voting) and Class B (nonvoting) shares for $0.63 per share, a 66.67% premium.
“We believe in news. With this transaction we can ensure a future for world-class journalists and world-class journalism befitting the paper’s storied history,” said Bitove. “We are committed to investing in the news business, along with preserving the Atkinson Principles, as fairness and accuracy will continue to guide the papers’ prevailing value system.”
Rivett, who recently stepped down from his role as president of Fairfax Financial Holdings, also commented on the deal.
“Since its inception as the Evening Star, The Star has been the voice of this city. As Canada’s largest daily newspaper, it has fulfilled a vital civic role as an outlet for expert opinion and what’s trusted as true,” Rivett said.
According to TheStar.com, the company will go private so that they can focus on long-term goals versus quarterly financial results for shareholders.
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“The harsh realities of the news media business are ill-suited to the quarter-bound short-term focus of shareholders. A private structure is needed and we have the patience and willingness to invest in Torstar’s long-term transformation,” Rivett and Bitove said.
“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” said John Honderich, Torstar chairman of the board, the company’s May 26 announcement. “We hope the sale will benefit Torstar in the years ahead and believe that this is the beginning of an exciting new chapter for the company. We are delighted to know that the new owners have pledged to build on Torstar’s legacy of quality journalism and to promote the Atkinson Principles at the Toronto Star.”
“We believe in news. With this transaction we can ensure a future for world-class journalists and worldclass journalism befitting the Star’s storied history,” said Bitove. “My family has always sought to contribute to the fabric of this country. Today’s announcement reflects those values and builds on that history. We are committed to investing in the news business, along with preserving the Atkinson Principles, as fairness and accuracy will continue to guide the papers’ prevailing value system. While the company’s business will become private, its focus will remain steadfastly public. As the business of news changes, the Toronto Star’s founding principles will not.”
The deal, which must be approved by shareholders at a special July meeting, is subject to standard provisions. The deal is expected to close in the third quarter of 2020. If NordStar willfully breaches the agreement, the company will pay Torstar a termination fee of $3.5 million.
According to Torstar’s March 31, 2020 financial statement, the company had an operating loss of $30.5 million and a net loss of $23.5 million (Canadian) and an accumulated deficit of $241.2 million. This is a sad state of affairs for a company that got its start in 1892 as The Evening Star. Like so many other newspapers around the world, Torstar has suffered from the swift digital revolution and not being able to pivot quickly enough to balance revenue sources and costs. This deal is an excellent opportunity for the Toronto Star to start over.