Torstar shares halted on TSX after getting rival takeover offer for newspaper company
New bid is said to be 14% higher than Bitove-led offer
A second bid to buy newspaper publishing empire Torstar Corp. has emerged, one that reportedly values the company 14 per cent higher than the previous offer.
Torstar Corp. confirmed on Thursday that a second offer to buy the company has come forward, and the company's board is currently considering the unsolicited offer by an unnamed private investor group.
Torstar "is engaging in discussions and negotiations with the New Offeror regarding its non-binding proposal," the company said in a press release.
The company did not say who was making the offer, but the Globe and Mail newspaper first reported that the bid came from the Proud Brothers, Matthew and Tyler, who made their money in the technology sector.
The new bid reportedly offers 72 cents a share to buy the company. That would value the company at $58 million, better than the 63-cent offer in May from the Bitove and Rivett families' company Nordstar, which valued the company at $52 million.
Like many newspapers, the owner of the Toronto Star, Hamilton Spectator and 70 other publications across Canada has seen a precipitous drop in its paid circulation and advertising revenue, and a corresponding increase on the digital side is not making up for it.
The company took in $479 million worth of revenue in 2019, down $64.4 million or 12 per cent from 2018's level, and spent $51 million more than it earned, according to its latest earnings.
But the company has $42 million in cash on its books, and no debt, which is what makes it an attractive acquisition even beyond the core business.
Shares in the company were halted in premarket trading on the Toronto Stock Exchange on Thursday morning, with regulators citing "pending news" as the reason for the halt.
Torstar shareholders are scheduled to vote on whether or not to accept the original NordStar offer on July 21.
Torstar's board says it still recommends shareholders vote for the NordStar deal, pending the discussions they are having with those who've made the new offer.