The following excerpt was sent out from kelownadailycourier.ca:
Postmedia Network Canada Corp. said Tuesday that it’s in talks to merge with Nordstar Capital LP, the owner of Metroland Media Group and the Toronto Star.
The two publishers say the proposed deal, which is yet to be finalized, is a bid to create greater scale so they can respond to the “existential threat” facing the media industry.
“The viability of the newspaper industry in Canada is at an extreme risk,” said Jordan Bitove, publisher of the Toronto Star, in the news release.
Postmedia said discussions to consider a combination are so far non-binding, but that the proposed merger would see an even division of voting rights. Postmedia shareholders would hold a 56 per cent economic interest and Nordstar would hold a 44 per cent interest. Nordstar would retain a 65 per cent interest in Toronto Star Inc.
Postmedia, which owns publications including the National Post, Vancouver Sun and Calgary Herald, said the proposal would see the Toronto Star maintain editorial independence through the incorporation of a new company that would manage its editorial operations.
Postmedia has been struggling financially for years, saddled with extensive debt. It reported a net loss of $20.8 million in its latest quarterly results, while in its last full fiscal year it paid $31 million in interest expenses while carrying about $275 million in debt.
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