Sun Media expands Ontario presence with Osprey bid

The stage is set for fierce competition as Quebecor announced its acquisition of Osprey Media Income Trust Fund, which owns 20 daily newspapers and 36 community newspapers in Ontario.

The moves pits Sun Media and BowesÔÇösubsidiaries of QuebecorÔÇöagainst Torstar and its Metroland Media Group, which comprises over 100 newspapers.

The move would mean a dramatic change for the composition of the Canadian Community Newspapers Association. The Osprey purchase would make Bowes the largest corporate publisher in Canada with 114 member newspapers. Metroland would slip into second place with 98 members.

The deal, announced Friday, June 1, 2007, is worth $517 million. An acquisition this large would increase Bowes’ presence in Ontario by close to doubling the number of newspapers it has in that province. It would increase daily newspaper ownership from 9 to 29 titles.

“We believe that the addition of the assets of Osprey to our existing portfolio in the print media sector will make our organization better equipped to meet the challenges facing our industry. With the combination of Sun Media and Osprey, Quebecor Media consolidates its role as a leader in the industry,” said Pierre Karl P├®ladeau, President and CEO of Quebecor Media, in a statement.

In March, Osprey announced that it was conducting a ÔÇ£strategic alternative review process.ÔÇØ Since the Harper governmentÔÇÖs crackdown on income trust funds in October, 2006, Osprey had struggled to perform.

OspreyÔÇÖs board of trustees has approved the acquisition, which is expected to close in August, 2007, but can still break the deal if another buyer comes forward with a better offer: part of the deal is a $15-million termination agreement.