Torstar Corp president and chief executive officer David Holland.MARK BLINCH
Torstar's shareholders may see a silver lining in the company's failed bid for CanWest Global Communications' newspapers, as the family-controlled media company now has room to boost its dividend.
Torstar cut its quarterly dividend in half at the end of 2008, as the recession bit in to revenues. The payout would likely have remained at current levels if the company won out in the auction of CanWest, as Torstar would have taken on debt to fund the purchase.
But the papers fetched $1.1-billion from their unsecured creditors - Torstar bid $800-million, according to sources. With a compelling reason for conserving capital now gone, TD Waterhouse pointed out in a report on Wednesday that "Torstar has room to increase its dividend."
Andrew Willis