CanWest Global Communications Corp. of Winnipeg, Manitoba has acquired the majority of Canadian print and Internet assets owned by Hollinger, including most community newspapers. Total price is $3.5 billion.
In what was described by Leonard Asper, CanWest president as the largest media deal in Canada and the second largest print deal in North America, the company will now become the largest content provider in the country, by its own calculation. In addition to the large and medium market dailies and community newspapers, the deal includes various shoppers, TV publications and all of the Southam magazine and information group, publishers of trade and specialized publications. The Internet sites Canada.com as well Careerclick.com, carsclick.com and faceoff.com are included as well.
The purchase price was calculated on the basis of 10 times EBITDA with the exception of the National Post and the Internet sites. The transaction will give Hollinger a 15 percent share in CanWest and a six percent voting interest, second only to the Asper family.
During a media conference in Toronto, Leonard Asper stressed that his company had an opportunity to choose among the Hollinger properties and that they are committed to hanging onto the newspapers they purchased. The deal includes an 18 month management transition for the bulk of the papers and five years for the National Post which will continue to be jointly owned and controlled by Hollinger with Conrad Black remaining as chair.
Not included in the transaction was the UniMedia Group in Quebec and certain community newspapers in Ontario and British Columbia. It is not known what will become of these newspapers although Hollinger has noted that it may announce different buyers for some or all of its remaining Canadian newspaper holdings.
ÔÇ£ItÔÇÖs hard to know how this deal will affect community newspapers,ÔÇØ according to Sean Murray, newly elected president of the Canadian Community Newspaper Association. ÔÇ£There are many issues relating to media concentration, especially in communities where Global will own both print and television outlets. But their purchase can be taken as a vote of confidence in the community press. Community newspapers are clearly seen as important to the media mix as well as highly profitable.ÔÇØ
The deal is slated to close Sept. 30 subject to review by the Competition Bureau. A complete list of the publications purchased follows.
Major Dailies Acquired by CanWest:
The National Post (*50% see below )
Halifax Daily News The Regina Leader Post
The Telegram, St. John’s The Star Phoenix, Saskatoon
The Guardian, Charlottetown Calgary Herald
Montreal Gazette Edmonton Journal
Ottawa Citizen Vancouver Sun
Windsor Star The Province, Vancouver
The Times Colonist, Victoria
*The National Post is treated separately from other Hollinger newspaper
properties in this transaction. In recognition of its value as a highly
successful national newspaper, still in a start-up phase, the National Post
will remain a stand-alone publication jointly owned by CanWest and Hollinger.
Each party will hold 50% of the company. It was agreed that Mr. Conrad Black
will remain Chairman of the National Post for the next five years.
Detailed list of daily, non-daily, weeklies and shopper publications:
ATLANTIC PROVINCES:
The Halifax Daily News The Charlottetown Guardian Group
The Sunday Daily News The Guardian
The Bedford Vacation PEI
The Nova Scotia Business Journal The Insider
The Burnside News Voice For Island Seniors
Off Island Islander
The Atlantic Group Real Estate Guide
Bathurst Northern Light Helpful Pages
Cape Breton Post
Evening News The Summerside Group
Truro Daily News The Journal Pioneer
Marketplace Island Harvest
Post Record TV and Real Estate