Osprey Media Income Trust fund, which owns over 50 newspapers, has announced a strategic review. This means that the company is open to a number of alternatives, including being sold. Shares of the company are down 45 per cent since their inception.
The decision comes in the wake of underperformance and problems with the company’s income trust structure (income trusts lost their tax-advantaged status in October, effective in 2011).
In the official press release, “Osprey emphasized that the strategic review process is intended to consider the complete range of alternatives in light of the new environment facing the income trust sector. It noted, however, that there can be no assurance that the evaluation process will result in any transaction.”
Since the announcement, media pundits have speculated about what companies might make bids. FP Newspaper trust, owner of the Winnipeg Free Press and Brandon Sun, announced that it would make an offer.
The most logical bidder is Torstar, whose Metroland group of papers compete most strongly with Osprey Media in many markets across Ontario. It has been noted in the Globe and Mail that Torstar may not have room on their balance sheets to complete the purchase.
There are other companies that may consider bids: Transcontinental Media, Glacier Ventures, CanWest, and BC-based Black Press. Further speculation is that the main owners of the trust, Scotiabank and the Ontario Teachers’ Pension Plan, may take the company private.